A theory or a model
A. is a detailed analysis of what ought to be.
B. captures all aspects of the real world.
C. is a simplified, abstract view of reality.
D. is based on each economist's value judgments.
Answer: C
You might also like to view...
When there are external costs of production, such as when electric utilities burn coal, a competitive market will produce an inefficient level of output
Indicate whether the statement is true or false
If the rational expectation theory is accurate, equilibrium real GDP will change in the short run: a. whenever the aggregate demand curve shifts
b. only if discretionary fiscal policy is used. c. only if there is a shift in aggregate demand that could not have been predicted from the information available to the public. d. only if discretionary monetary policy is used.
Recently, in Smalltown, the price of Twinkies fell from $0.80 to $0.70 . As a result, the quantity demanded of Ho-Ho's decreased from 120 to 100 . What would be the appropriate elasticity to compute? Using the midpoint method, compute this elasticity. What does your answer tell you?
What causes a decrease in income in this graph?
a. The total of areas d + f is less than the total of areas e + d.
b. The total of areas d + f is more than the total of areas e + d.
c. The total of areas e + f is less than the total of areas e + d.
d. The total of areas e + f is more than the total of areas e + d.