The basic principles of economics are Select one:
a. Important only to professional economists.
b. Always complex.
c. Necessarily abstract.
d. Reflective of common sense.
d. Reflective of common sense.
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Tom and Jerry are the only members of society. The table above shows their marginal benefits from defense satellites, a public good. If the marginal social cost of a satellite is $36, the efficient quantity of satellites is
A) 1. B) 2. C) 3. D) 4.
Economists exclude many interesting economic structures and activities from their models. What they focus on is
a. the real world as they see it b. comparisons between the real world and their models c. understanding how their models work and the outcomes they generate d. the relationship between the physical economic reality and money e. the production of real goods and how they are traded
A sudden change in the normal behavior of inflation, unrelated to the nation's output gap, is called:
A. inflation inertia. B. long-run equilibrium. C. short-run equilibrium. D. an inflation shock.
The extent to which the demand for a good changes when the price of a substitute or complement changes, other things remaining the same, is measured as the
A) income elasticity of demand. B) cross elasticity of demand. C) price elasticity of demand. D) price elasticity of supply. E) cross income elasticity of demand.