In order to eliminate unnecessary details and highlight the essential features of an economic model, an economist makes
a. critical assumptions
b. macroeconomic assumptions
c. normative assumptions
d. positive assumptions
e. simplifying assumptions
E
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The statement, “Supply creates its own demand,” is also known as
a. Keynes’ law. b. neoclassical economics. c. Say’s law. d. Adam Smith’s law.
Which of the following attributes of trade explain why it is important for economic prosperity?
a. Trade moves goods from people who value them less to people who value them more. b. Trade makes it possible to produce a larger output as a result of lower per unit costs that often accompany large-scale production. c. Trade makes it possible to produce a larger output as a result of gains from division of labor and specialization. d. All of the above.
The quantity sold in a market will decrease if the government decreases a
a. binding price floor in that market. b. binding price ceiling in that market. c. tax on the good sold in that market. d. All of the above are correct.
Increases in productivity cause the:
A. production function to shift upward. B. production function to shift downward. C. depreciation function to shift downward. D. investment curve to shift downward.