An economic model is a:
A. realistic version of an economic environment.
B. detailed version of an economic issue.
C. fictional representation of an entire economy.
D. simplified representation of an economic environment.
Answer: D
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The probability that an employed worker will lose his or her job in the next month is known as
A) the unemployment rate. B) the job finding rate. C) the underemployment rate. D) the job loss rate.
The administrators of welfare programs have strong incentives to eliminate poverty
a. True b. False
In the short run in perfect competition,
a. each firm can sell whatever quantity it wishes to sell at the market price b. the market demand curve cannot shift c. new firms will enter the market if existing firms are earning economic profits d. new firms will enter the market if existing firms are earning normal profits e. existing firms will exit the market if they are suffering losses
Advertising
a. provides information about products, including prices and seller locations. b. has been proven to increase competition and reduce prices compared to markets without advertising. c. signals quality to consumers, because advertising is expensive. d. All of the above are correct.