The "all other things unchanged" assumption is used to:
A) express the fundamental questions in economics.
B) approximate real-world conditions.
C) simplify the very complex real world.
D) do all of the above.
Ans: C) simplify the very complex real world.
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Which of the following statements is true of equilibrium?
A) Economic agents have an incentive to divert from equilibrium. B) Each economic agent can reach equilibrium irrespective of the actions of others. C) In equilibrium, the opportunity cost of the choices made by each economic agent is zero. D) In equilibrium, all economic agents are choosing the best feasible option simultaneously.
Based on the graph showing the crowding-out effect, due to the crowding-out effect, the economy ______ its full potential output.
a. cannot stay at
b. exceeds
c. performs exactly at
d. cannot estimate
Refer to Figure 8.4. Average total costs will be minimized at A) six microwave ovens. B) an output level between three and six microwave ovens. C) two microwave ovens. D) an output level greater than six microwave ovens.
Economists have used ________ and ________ in experiments designed to determine whether consumers care about fairness when they make decisions
A) Giffen goods; luxury goods B) the income effect; the substitution effect C) the ultimatum game; the dictator game D) network externalities; the endowment effect