Economic models omit many details to allow us to see what is truly important
a. True
b. False
Indicate whether the statement is true or false
True
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If the interest rate is 4 percent, the present value of $10,000 to be received two years from today is about
A) $9,246. B) $9,615. C) $10,816. D) $10,400.
Any rule that is used to make a choice is
A) positive-sum game. B) zero-sum game. C) strategy. D) negative-sum game.
The substitution effect in the labor supply decision refers to
a. substituting leisure for work as the wage rate rises b. substituting market work for nonmarket work as the wage rate falls c. working more hours as the wage rate falls d. working fewer hours as the wage rate rises e. substituting market work for leisure or nonmarket work as the wage rate rises
Mexico and the members of OPEC produce crude oil. Realizing that it would be in their best interests to form an agreement on production goals, a meeting is arranged and an informal, verbal agreement is reached. If both Mexico and OPEC abide by the agreement, then OPEC's profit will be $200 million and Mexico's profit will be $100 million. If both Mexico and OPEC cheat on the agreement, then OPEC's profit will be $175 million and Mexico's profit will be $80 million. If only OPEC cheats, then OPEC's profit will be $185 million, and Mexico's profit will be $60 million. If only Mexico cheats, then Mexico's profit will be $110 million, and OPEC's profit will be $150 million.To OPEC, the payoff to abiding by the agreement is either:
A. $175 million or $185 million. B. $60 million or $100 million. C. $200 million or $185 million. D. $150 million or $200 million.