What can good assumptions do?
a) cause economists to leave out important variables that make their theories worthless
b) simplify the complex world and make it easier to understand
c) further complicate an already difficult topic
d) allow economists to see the "big picture" instead of only small segments
Ans: b) simplify the complex world and make it easier to understand
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Hiring foreign labor and producing in other countries is an example of offshoring
Indicate whether the statement is true or false
The increase in output that is generated by an additional unit of input is called the:
A. input-output relationship. B. production function. C. resource product. D. marginal product.
A contestable market is one where:
A. there is a threat of entry. B. there are no firms that threaten to enter the market. C. firms already in the market cannot leave the market. D. only one firm at a time can serve the market.
What type of economics would most typically deal with aggregates?
A. macroeconomics B. microeconomics C. financial economics D. normative economics