A good economic model
A. describes the real world completely and in detail.
B. captures the essential relationships of the problem under consideration.
C. cannot be refuted.
D. captures all relationships about the problem under consideration.
Answer: B
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Refer to the above figure. A minimum wage has been set at WM. The amount of unemployment is
A. zero. B. at Qe. C. QSÂ minus QD. D. not computable from the information given.
Consider the budget line in the above figure. If the consumer has income of $240, what is the relative price of movies?
A) .42 books B) 2.4 books C) $10 per movie D) $24 per movie
If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock. B. long-run supply shock. C. long-run demand shock. D. short-run demand shock.
Assume that an economy experiences both positive population growth and technological progress. Once the economy has achieved balanced growth, we know that
A) S/NA = (? + gA + gN)K/NA. B) S/NA = (gA + gN)K/NA. C) I/NA = (?)K/NA. D) I = ?K. E) none of the above