Why do economists tend to create models in diagrammatic form?
a. Diagrams hide reality, and theory is an attempt to avoid reality.
b. It is easier than building models out of physical objects.
c. Economic reality cannot possibly be represented except in diagrams.
d. Most economists are frustrated artists, and like to draw when possible.
e. All of the above are correct.
b
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An example of an uncontrollable resource that contributes to diseconomies of scale for a movie theater is
a. concession stand staff b. public roads congested with traffic c. volume discounts from movie distributors d. a single lobby in the theater e. bigger, more noticeable newspaper ads
A . Explain how the existence of the Federal Savings and Loan Insurance Corporation (FSLIC) may unintentionally have increased the number of S&L failures in the 1980s and 1990s. b. What safeguards can help prevent this from happening?
If there is a negative externality involved in producing good X, then
A. engaging in international trade will solve the inefficiency. B. a subsidy to the producer of good X can correct the inefficiency involved. C. the production possibility curve will be too steeply sloped toward good X. D. None of these is true.
Because of unseasonably cold weather, the supply of oranges has substantially decreased. This statement indicates the:
A. demand for oranges will necessarily rise. B. equilibrium quantity of oranges will rise. C. amount of oranges that will be available at various prices has declined. D. price of oranges will fall.