Economic models
a. are not useful because they omit many real-world details.
b. are usually composed of diagrams and equations.
c. are useful because they do not omit any real-world details.
d. are usually plastic representations of the economy.
b
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Refer to Figure 3.6. Answer the following questions about the game represented in the figure:
a. What type of game is represented by the payoff matrix? b. Does Terrance have a dominant strategy, and if so, what is it? c. Does Phillip have a dominant strategy, and if so, what is it? d. At what outcome or outcomes do the players coordinate? e. Are there any Nash equilibria, and if so, what, are they?
The above figure shows the Lorenz curve for wealth for the nation of Rusha. The poorest forty percent of the population own what percent of wealth?
A) 0 percent B) 10 percent C) 20 percent D) 40 percent
An increase in lifetime wealth
A) increase current labor supply and increase current consumption demand. B) increase current labor supply and decrease current consumption demand. C) decrease current labor supply and increase current consumption demand. D) decrease current labor supply and decrease current consumption demand.
The correlation between an asset's real rate of return and its risk (as measured by its standard deviation) is usually
A) positive. B) strictly linear. C) flat. D) negative. E) chaotic.