Holding all variables constant but one and assessing the impact of the one variable that has changed is an example of using
A) the ceteris paribus assumption.
B) an economic model based on unrealistic assumptions.
C) a flawed economic model.
D) an untestable proposition.
Answer: A
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In long-run full-employment equilibrium, which of the following is true? a. The CPI equals AD equals the peak of the production function curve
b. The horizontal LRAS curve equals the intersection of the demand and supply curves inthe labor market. c. The CPI equals the aggregate production function at the equilibrium wage rates. d. The CPI equals AD equals SRAS equals LRAS.
Business managers are people who:
A. run businesses on a day-to-day basis. B. entertain the workers. C. engage exclusively in business travel. D. own the physical capital used in production.
Asset price "bubbles" are more likely to occur when interest rates are relatively low.
Answer the following statement true (T) or false (F)
Anti-trust regulators are likely to prohibit two firms from merging if
a. the combined firm will undercut competitors with lower prices. b. the combined firm will have a large share of the market. c. there are many other firms in the industry. d. there are sizable synergies to the combination.