All of the following are true of models except:
a. they simplify reality.
b. they are good if they make predictions that align with real world observations.
c. they are used exclusively by economists.
d. supply/demand analysis is an example of a model.
c. they are used exclusively by economists.
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Which of the following is likely to shift the market demand curve for school textbooks to the right?
A) A fall in the price of school textbooks B) An increase in school tuition fees C) A fall in the total income of all consumers D) An increase in the enrollment rates in high schools
Cooperation among people in an urban, industrialized society
A) becomes more difficult as transaction costs increase. B) is dependent upon people having a detailed, specific knowledge of the wants and abilities of others. C) is impossible once the number increases beyond a few thousand. D) requires coordination by central-planning committees. E) will not occur unless most people approve of the goals and values of others.
In the political market place, typical voters
A) support policies that they think will make the poor better off. B) fire bureaucrats who support efficient policies. C) are fully informed. D) are sometimes rationally ignorant about a policy.
A combination of high inflation and recession, usually resulting from a supply shock, is known as
A) hyperinflation. B) disinflation. C) stagflation. D) depression.