What does it mean to say economics is an empirical science, and how is this related to the question of deciding on the usefulness of a model?
What will be an ideal response?
Economists examine evidence to test whether a model is useful or not. That is, real-world data are studied to see if they conform to the predictions of the model. A model is useful if it generates testable predictions and implications for the real world. A model that predicts better is generally considered a better model.
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Receipt of foreign aid permits less-developed countries to move to a point outside their production possibilities curve
a. True b. False Indicate whether the statement is true or false
The permanent income hypothesis is associated with
a. John M. Keynes b. James Duesenberry c. Franco Modigliani d. Adam Smith e. Milton Friedman
The world's population is increasing for many reasons. Which reason seems plausible, but is NOT currently contributing to population growth?
a. increased agricultural productivity b. increased birth rates c. decreased mortality rates d. improvements in health care
If the marginal cost is increasing over a given output range, the average total cost must increase.
Answer the following statement true (T) or false (F)