If two competing models are offered to explain a certain economic phenomenon, the better model is the one
A) that is the newest since newer models are better than old models.
B) with the fewest unrealistic assumptions.
C) that more often predicts with most accuracy.
D) that is not subject to empirical verification.
C
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Use the following statements to answer this question: I. An increase in the firm's fixed costs will also shift the firm's short-run supply curve to the left. II
An increase in the firm's fixed costs will not shift the firm's short-run supply curve to the right or left, but it may alter how much of the marginal cost curve is used to form the short-run supply curve. A) I and II are true. B) I is true and II is false. C) II is true and I is false. D) I and II are false.
An unexpected decrease in aggregate demand
A. causes the price level to rise and the unemployment rate to rise. B. causes the price level to fall and the unemployment rate to rise. C. causes the price level to rise and the unemployment rate to fall. D. causes the price level to fall and the unemployment rate to fall.
The tax revenue that is generated by a government tax is counted towards total welfare
Indicate whether the statement is true or false
Refer to the diagrams for two separate product markets. Assume that society's optimal level of output in each market is Q 0 and that government purposely shifts the market supply curve from S to S 1 in diagram (a) on the left and from S to S 2 in
diagram (b) on the right. The shift of the supply curve from S to S 1 in diagram (a) might be caused by a per-unit:
A. subsidy paid to the producers of this product.
B. tax on the producers of this product.
C. subsidy paid to the buyers of this product.
D. tax on the buyers of this product.