Which is NOT true about the use of economic models?
A) Economic models are simplified representations of the real world.
B) Economists always use experiments in science laboratories to test their theories.
C) Economists use what has already happened in the real world to test their theories.
D) Economists are employed to explain economic phenomena but are never used to predict what might happen next.
D
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PlayStations and PlayStation games are complementary goods. A technological advance in the production of PlayStations will
a. increase consumer surplus in the market for PlayStations and decrease producer surplus in the market for PlayStation games. b. increase consumer surplus in the market for PlayStations and increase producer surplus in the market for PlayStation games. c. decrease consumer surplus in the market for PlayStations and increase producer surplus in the market for PlayStation games. d. decrease consumer surplus in the market for PlayStations and decrease producer surplus in the market for PlayStation games.
Exhibit 9-5 Keynesian aggregate expenditures model where the MPC is 0.75
?
To eliminate the GDP gap shown in Exhibit 9-5, the government should cut its spending by:
A. $0.5 trillion. B. $1 trillion. C. $1.5 trillion. D. $2 trillion.
The law of diminishing marginal product is a statement
A) that concerns changes in variable input and changes in output. B) that concerns the long run. C) that concerns changes in profits. D) that relates to plant size.
With a given plant size, an increase in output will NOT result in an increase in
A. average fixed cost. B. total cost. C. average variable cost. D. total fixed cost.