In building a model to analyze economic situations, one of the important assumptions is
A) ceteris paribus.
B) scarcity.
C) conversion abstraction.
D) cognitive dissonance.
Answer: A
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Most public goods produced by government are nonexcludable because the costs of exclusion are too high
a. True b. False
Which of the following characteristics distinguishes oligopoly from other market structures?
a. a horizontal demand curve b. a downward-sloping demand curve c. production of homogeneous outputs d. production of differentiated outputs e. interdependence among firms in the industry
The fewer the substitutes for a good the greater will be the value of the price elasticity of demand coefficient
a. True b. False Indicate whether the statement is true or false
Suppose the economy's short-run equilibrium level is at a point to the left of Natural Real GDP. Which of the following statements is true?
A) The economy is in an inflationary gap. B) The economy is in a recessionary gap. C) The economy is in long-run equilibrium. D) This situation is actually impossible.