Models should:
A. attempt to include every detail of the situation being studied.
B. attempt to describe a situation with perfect accuracy.
C. not be applied to microeconomics.
D. describe a real life situation accurately.
D. describe a real life situation accurately.
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Producing paper creates pollution. There is no externality in the consumption of paper. The efficient quantity of paper is when the
A) marginal social benefit of paper is equal to zero. B) marginal social cost of the pollution from making paper is equal to zero. C) marginal social benefit of paper is equal to the marginal social cost of paper. D) marginal private cost of the pollution from making paper is equal to zero.
If the economy is at point 1 in Figure 13.1 and there is no policy intervention, what happens next?
A) the economy moves to point 2 B) the economy remains at point 1 C) the economy moves to the left along the AS curve D) the AS curve shifts down, causing both output and inflation to decline E) the AS curve shifts up, causing both output and inflation to rise
In long-run competitive equilibrium, a firm that owns factors of production will have an
A) economic profit = $0 and accounting profit > $0. B) economic profit > $0 and accounting profit = $0. C) economic and accounting profit = $0. D) economic and accounting profit > $0. E) economic and accounting profit can take any value.
The Dansby-Willig index measures the potential for a change in social welfare by examining the effect of changes in industry:
A. revenue. B. production cost. C. output. D. profit.