The assumptions that form the basis of any economic model are referred to as:
A. theorems.
B. objectives.
C. building blocks.
D. precepts.
Answer: C
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Reservation price is: a. the maximum amount a customer would be willing to pay for a unit of output. b. the minimum price at which a seller would be willing to supply the product. c. always equal to the marginal cost
d. the same as market price.
If the price of inputs falls and the budget deficit rises due to an increase in government spending, then the:
a. Price index rises, and real GDP rises. b. Price index rises, and real GDP falls. c. Price index rises, and the change in real GDP is uncertain. d. Price index falls, and real GDP rises. e. Price index is uncertain, and real GDP rises.
An increase in the price of off-road vehicles will result in
A) a smaller quantity of off-road vehicles supplied. B) a larger quantity of off-road vehicles supplied. C) an increase in the demand for off-road vehicles. D) a decrease in the supply of off-road vehicles.
The net effect of regional trade agreements has been
A. no change in the total amount of trade in the world. B. a decrease in the total amount of trade in the world. C. an increase in the total amount of trade in the world. D. either an increase or decrease in the amount of trade in the world, depending on where trade takes place.