Which of the following statements is true of models?
A) The predictions of a model are referred to as data.
B) A model is formulated after developing a hypothesis.
C) Models are always based on assumptions that are known to be true.
D) It is more important for a model to be simple and useful than to be precisely accurate.
D
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If a good has the characteristic of nonrivalness, it means that
a. the good is publicly provided b. it is impossible to prevent others from sharing the benefits of consumption c. the benefits linked to consumption are indivisible d. none of the above
A price ceiling established below the market clearing price will usually cause
A) nonprice rationing. B) an excess supply. C) no change in the market clearing price. D) a decrease in the market clearing price.
Refer to the diagrams, which pertain to a purely competitive firm producing output q and the industry in which it operates. In the long run we should expect:
A. firms to enter the industry, market supply to rise, and product price to fall.
B. firms to leave the industry, market supply to rise, and product price to fall.
C. firms to leave the industry, market supply to fall, and product price to rise.
D. no change in the number of firms in this industry.
A production possibilities curve shows the
a. dollar costs of producing two different goods b. amounts of labor and capital needed to produce one good c. various combinations of goods that can be produced d. prices of different goods that are produced in an economy e. inefficient use of available resources and technology