Final answer:
a. Recognize the problem
In economic analysis, finding out what the biggest competitor is doing is not a formal step in the decision-making process, which typically involves recognizing the problem, building a model, and auditing the process. Economists may also perform a root cause analysis and gather expert information, reflecting creativity akin to that of a carpenter facing a unique task. A cost/benefit analysis is a common tool used to aid decisions by weighing marginal costs against benefits.
Step-by-step explanation:
The economic analysis decision-making process includes several steps, but one of them is not explicitly focused on the actions of competitors. These steps typically involve recognizing the problem, constructing a model, and auditing the process. However, finding out what the biggest competitor is doing is not usually a formal part of economic analysis. In a situation where an economist does not have a specific model for analyzing an issue, they should approach the problem creatively, just like a carpenter would craft a unique or custom solution when faced with a new challenge. This involves gathering information, consulting experts, and performing a root cause analysis to truly understand the problem at hand.
When faced with difficult decisions, performing a cost/benefit analysis can aid in the decision-making process. This involves weighing the marginal costs against the marginal benefits and using a T-shaped chart to contrast them. Costs may include money, effort, and other sacrifices, while benefits could be gains in terms of money, time, experience, and other improvements.