Which of the following statements is true?
a. Economic theory does not make unrealistic assumptions.
b. Economists should not ignore details while focusing on complex problems.
c. Abstraction forms an important part of economic analysis.
d. The word theory means same for both economists and laymen.
c
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Suppose the airplane market is an oligopoly. If the firms act as a monopolist, the price will be ________ and if the firms act as competitors the price will be ________
A) $13 million per plane; $1 million per plane B) $1 million per plane; $13 million per plane C) $13 million per plane; $13 million per plane D) $1 million per plane; $1 million per plane E) None of the above answers is correct.
Using the data in the above table, if potential GDP for this economy is $25 billion, then at the present moment real GDP is
A) less than potential GDP. B) equal to potential GDP. C) greater than potential GDP. D) at the full-employment level of output. E) not comparable to potential GDP.
Which of the following is NOT a reason why natural GDP might fall as a result of a supply shock?
A) The production function shifts downward. B) There might be a voluntary decline in the supply of labor in response to the decline in real wages. C) The supply of labor is a function of the expected wage rate. D) none of the above
Suppose the state legislature in your state imposes a state licensing fee of $100 per year to be paid by all firms that file state tax revenue reports. This new business tax:
A) increases marginal cost. B) decreases marginal cost. C) increases marginal revenue. D) decreases marginal revenue. E) none of the above