Which of the following implies that a model is an approximation?
A) The model is not based on any assumption.
B) The predictions of the model are mostly wrong.
C) The predictions of the model will hold in most cases but not all.
D) The predictions of the model cannot be tested with data.
C
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If we say that a price is too high to clear the market, we mean that:
A. the price of the good is likely to rise. B. quantity supplied exceeds quantity demanded. C. quantity demanded exceeds quantity supplied. D. the equilibrium price is above the current price.
A monopolistically competitive firm influences market price by virtue of its size.
Answer the following statement true (T) or false (F)
What do a rubbernecking traffic jam and the paradox of thrift have in common?
A. In both cases, individual behavior has large negative consequences for the whole of society. B. In both cases, seemingly bad behavior ends up harming everyone. C. In both cases, seemingly careless behavior leads to good times for all. D. In both cases, government intervention can only make matters worse
If the European Central Bank increases interest rates
A) the demand curve for European euros shifts rightward and the supply curve of European euros shifts leftward. B) the demand curve for European euros shifts leftward and the supply curve of European euros shifts rightward. C) the demand curve for European euros and the demand curve for U.S. dollars both shift rightward. D) the demand curve for European euros shifts leftward and the demand curve for U.S. dollars shifts rightward.