Economic models are only applicable to free-market countries
A) False. Economic models are applicable wherever there is scarcity.
B) True. Economic models are applicable only when private citizens are free to make their own decisions.
C) False. Economic models are applicable in all countries with more than one million people, regardless of political structure.
D) True. Economic models are only applicable when government is small relative to the rest of the economy.
A
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The multiplier effect relates changes in
A. disposable income to changes in consumption. B. the price level to changes in real GDP. C. the interest rate to changes in investment. D. spending to changes in real GDP.
The above figure shows the production possibility frontier for a country. Suppose the country is producing at point D. What would be the opportunity cost to move to point C?
A) 6 thousand bottles of wine B) 15 thousand bottles of wine C) 12 tons of rice D) Nothing, it is a free lunch. E) This movement is not possible without economic growth.
The unregulated profit maximizing monopolist prefers to operate where demand is inelastic
Indicate whether the statement is true or false
The income of consumers increases. and the wage rate in the DVD industry increases. As a result
A) the price of DVDs stays the same and the quantity sold can either increase or decrease, depending on whether the change in demand is greater than the change in supply. B) the price of DVDs increases and the quantity sold can either increase, decrease or stay the same depending on whether the change in demand was greater than the change in supply. C) the equilibrium quantity sold increases and price can either increase or decrease, depending on whether the change in demand is greater than the change in supply. D) the equilibrium quantity sold can either increase or decrease and the price can either increase or decrease, depending on whether the change in demand was greater than the change in supply.