In an economic model, assumptions
A) must be applicable to all real-world situations.
B) must be eliminated before being used to make sure the model is realistic.
C) are not important in determining the usefulness of the model.
D) define the set of circumstances in which the model is most likely to be applicable in the real world.
D
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Sharmila has a budget line for DVDs and books. DVDs are on the vertical axis and books on the horizontal. Her budget line becomes steeper as
A) the price of a DVD falls. B) the price of a DVD rises. C) her income decreases. D) her income increases.
Unlike a perfect competitor, a monopolist faces the market demand curve
Indicate whether the statement is true or false
A law that requires the money supply to grow by a fixed percentage each year would eliminate
a. the time inconsistency problem, but not political business cycles. b. the political business cycle, but not the time inconsistency problem. c. both the time inconsistency problem and political business cycles. d. neither the time inconsistency problem nor political business cycles.
Which of the following would least likely? be, for the typical? student, the opportunity cost of attending a class at? 11:00 a.m.?