When constructing economic models, economists are more concerned with
A) what people say than what they do.
B) what people think than what they need.
C) what people do than what they say.
D) what people say than how they act.
Answer: C
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
In short-run equilibrium, the perfectly competitive firm of Figure 9-3 will charge
a.
$5
b.
$7
c.
$8
d.
$10
e.
more than $10
In which of the following situations would a positive externality most likely be involved?
A. Shawn is sitting at home one day when she gets a telephone call, informing her that she has won $10,000 in a contest she entered three months ago. B. There are eight houses in the neighborhood where Rodney lives. Rodney likes nice-looking yards, and last week his neighbors began to beautify their yards. C. Willy needs eight hours of sleep each night to feel good. Last night he got eight hours of sleep. D. Patrick received an A on a biology exam. He is feeling better about his chances of getting admitted to medical school.
The difference between a nation’s value of its exports and imports is called the balance of _________.
a. trade b. payments c. goods d. shipments