What is the glue that holds modern economics together?
A. The invisible hand theorem
B. The supply and demand model
C. Modeling
D. The economic decision rule
Answer: C
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At the efficient level of production, ________
A) producer surplus must be greater than consumer surplus B) consumer surplus must be greater than producer surplus C) there is no deadweight loss D) the market price is greater than the monopoly price
Because we cannot observe or measure utility
A) the predictions of marginal utility theory cannot be verified. B) marginal utility theory is incomplete and so its predictions might not be valid. C) marginal utility theory must be derived from assumptions about demand curves because demand curves can be measured. D) None of the above answers are correct.
Which of the following is important in determining the extent of competition in an industry?
A) the level of market demand for the industry's product B) whether or not the industry product is differentiated or standardized C) the minimum efficient scale of production relative to market demand D) the minimum level of short-run average total costs of production
Both price and quantity will increase when there is a(n)
a. increase in demand. b. decrease in demand. c. increase in supply d. decrease in supply.