"Assume that all individuals have perfect information about prices now and in the future, that they have identical tastes, that all markets are competitive, and that there is no government." This statement is indicative of how economists
a. apply the law of supply and demand.
b. employ marginal analysis.
c. are prevented from getting correct answers.
d. abstract for analytic purposes.
e. use realistic assumptions to develop theory.
d
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A competitive market is one:
A) that operates with little or no government control. B) where almost all exchanges take place involuntarily. C) that has price controls imposed by a ruling authority. D) where determination of equilibrium quantity need not rely on the forces of demand and supply.
The price of one good compared to the price of other goods refers to:
A. Relative price. B. Inflation. C. Deflation. D. The income effect.
When the "real" GDP falls, the rate of unemployment generally:
A. increases. B. decreases. C. stays constant. D. equals the natural rate.
Which of the following is an example of technological progress?
A. an increase in corn output resulting from genetic engineering B. the invention of the air conditioner C. the invention of LCD televisions D. All of these