A theorem is:
A. a set of equations that define a model.
B. a policy rule that concludes that a particular course of action is preferable.
C. a proposition that is logically true based on the assumptions of a model.
D. the application of models combined with judgment.
Answer: C
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Economic theory suggests that ________ interest rates are ________ important than ________ interest rates in explaining investment behavior
A) nominal; more; real B) real; less; nominal C) real; more; nominal D) market; more; real
The marginal product of labor is equal to the
a. incremental cost associated with a one unit increase in labor. b. incremental profit associated with a one unit increase in labor. c. increase in labor necessary to generate a one unit increase in output. d. increase in output obtained from a one unit increase in labor.
Suppose a certain firm is able to produce 165 units of output per day when 15 workers are hired. The firm is able to produce 181 units of output per day when 16 workers are hired, holding other inputs fixed. The marginal product of the 16th worker is
a. 10 units of output. b. 11 units of output. c. 16 units of output. d. 181 units of output.
A leftward shift of the supply curve for oil in the United States is most likely to result from:
a. Opening of new areas for oil exploration in the United States b. An increase in the costs of exploration and drilling for oil c. A decrease in the world price of oil d. A decrease in the price which oil companies must pay for drilling licenses