The purpose of the ceteris paribus assumption is to allow economists to
A) determine the relationship among several variables.
B) determine the impact of several variables on another variable.
C) isolate the impact of one variable on several variables.
D) isolate the relationship between two variables.
D
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Which of the following statements is true?
A) The supply of oil is perfectly inelastic; therefore, as the demand for oil increases over time the price of oil increases significantly. B) The supply of oil is very inelastic over short time periods but becomes more elastic over time. A given shift in supply results in a smaller increase in the price of oil when the supply is more elastic. C) Over short periods of time increases in the demand for oil are greater than increases in the supply of oil. Over the long run increases in the demand and the supply of oil are about equal. As a result, the price of oil increases greatly in the short run but is stable in the long run. D) The supply of oil is very elastic over short time periods but becomes perfectly inelastic over time. A given shift in supply results in a greater increase in the price of oil when the supply of oil is perfectly inelastic.
Fixed fee contracts are desirable when there is little uncertainty regarding the output
a. True b. False
If the public decides to hold more currency and fewer deposits in banks, bank reserves
a. decrease and the money supply eventually decreases. b. decrease but the money supply does not change. c. increase and the money supply eventually increases. d. increase but the money supply does not change.
The data below relate to a pure monopolist and the product it produces. What is the profit-maximizing output and price for this monopolist?
A. P = $12; Q = 5
B. P = $14; Q = 4
C. P = $15; Q = 3
D. P = $18; Q = 2