A fundamental aspect of economics is to
A) ensure that every firm makes a profit.
B) analyze how choices are made.
C) satisfy all our wants.
D) make sure that our resources will always be unlimited.
B
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A theory is an abstraction used often by economists to
A. describe a problem. B. keep all assumptions in their proper places. C. explain why things work the way they do. D. describe a hierarchical ordering of facts. E. arrange variables into a graphical format.
In the above table, if the firm sells 5 units of output, its total revenue is
A) $15. B) $30. C) $75. D) $90.
Firms in monopolistically competitive markets spend significant sums on product differentiation because:
a. it enables them to earn positive profits in the short run. b. it increases the elasticity of demand for a firm's product. c. it reduces the number of competitors. d. it causes the firm's supply curve to become horizontal so the firm can expand output indefinitely. e. it causes the firm's demand curve to become horizontal so that it can charge a fixed price for its product.
The fallacy of composition is essentially the error of: a. confusing association with causation
b. confusing normative economics with positive economics. c. generalizing from the individual to the whole. d. omitting relevant variables from an economic model.