By using the ceteris paribus assumption in conjunction with a model, economists can
A) suspend the rationality assumption.
B) avoid having their model depend on any additional assumptions.
C) hold certain factors constant.
D) be sure that the model will predict correctly.
C
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Harry's HVAC sells its new units bundled with after sales service. Why would it want to do that?
a. To ensure that the customer knows that they are stuck with Harry's service technicians b. To ensure that only the highest paid personnel get to service the units c. To ensure that the customers do not buy second-class servicing and then infer faulty design if a unit breaks down due to inadequate service d. All of the above
Columbia produces coffee with less labor and land than any other country; it therefore necessarily has a. an absolute advantage in coffee production
b. a comparative advantage in coffee production. c. both a comparative and absolute advantage in coffee production. d. an absolute advantage and comparative disadvantage in coffee production.
Isoquants are downward sloping because
A. if more of one input is used, then less of the other input must be used to keep output constant. B. as more units of an input are used to produce a product, the firm's marginal productivity increases. C. as more units of an input are used to produce a product, total cost increases. D. Both B and C
Your textbook costs $100 and the college snack shop sells ice cream for $1. Which of the following statements is true for most people?
A. You would be indifferent between a bookstore sale of 1% off on your text and one free ice cream in the snack shop. B. Because people are very different there is no general principle that can be suggested regarding the satisfaction people get in these situations. C. Most people will get greater satisfaction from the bookstore sale than from the snack shop giveaway. D. Most people will get greater satisfaction from the snack shop giveaway than from the bookstore sale.