Microeconomics
A. is generally too complex and abstract to be of much use in making real-world business decisions.
B. studies the behavior of individual economic units or segments of the economy.
C. contributes to the understanding of ordinary business practices or tactics.
D. all of the above.
E. both b and c.
Answer: E
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Betty is out on a first date with Barney. She decides to order the garden salad with dressing on the side in an effort to make a good first impression, even though she prefers leg of lamb. Economic theory:
A. cannot explain why someone would choose a meal that brings her less utility than another. B. would suggest that making a good impression with her choice will bring her more utility than ordering lamb and making a bad impression. C. would suggest that she values what Barney thinks of her and will derive negative utility if she does not impress him. D. cannot be used to explain matters of the heart.
Gross domestic product (GDP) is not a perfect measure of welfare because it: a. treats a dollar spent on guns the same as a dollar spent on education. b. treats a dollar spent on exports the same as a dollar spent on imports. c. double counts the value of leisure time
d. double counts depreciation. e. counts illegal activities in the underground economy.
Sir Isaac Newton's development of the theory of gravity after observing an apple fall from a tree is an example of
a. a controlled experiment that lead to the formulation of a scientific theory. b. being in the right place at the right time. c. an idea whose time had come. d. the interplay between observation and theory in science.
A technological advance in the production of digital video recorders will cause them to become less expensive.
Answer the following statement true (T) or false (F)