Demand functions in the multiplicative form are most common for all of the following reasons except:
a. elasticities are constant over a range of data
b. ease of estimation of elasticities
c. exponents of parameters are the elasticities of those variables
d. marginal impact of a unit change in an individual variable is constant
e. c and d
d
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A globe is a model. However, it lacks much of the detail that one would find on a map. Does that make the globe an inferior model? Why not?
What will be an ideal response?
In the economy of Talikastan in 2015, consumption was $200, exports were $150, GDP was $475, government purchases were $100, imports were $75, and investment was $100 . What were Talikastan's net exports in 2015?
a. -$75 b. -$225 c. $225 d. $75
In Gelate, Pennsylvania, the market for compact discs has evolved as follows. There are two firms that each use a marquee to post the price they charge for compact discs. Each firm buys CDs from the same supplier at a cost of $5.00 per disc. The inverse market demand in their area is given by P=10-2Q=, where Q is the total output produced by the two firms.
a) Solve for the Bertrand equilibrium price and market output. b) Would your answer differ if the products were not perfect substitutes? Explain.
The standard economists use to assess whether an activity should be undertaken is
a. majority vote
b. the marginal benefit assessment.
c. the gold standard
d. economic efficiency.