If an economic model includes an assumption that there are only two nations in the world, this would be an example of
a. a critical assumption
b. an implicit assumption
c. a simplifying assumption
d. a concrete assumption
e. a detail assumption
C
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In the United States, the most commonly cited measure of the price level is the consumer price index
Indicate whether the statement is true or false
Free riders are not a problem in the market for a private good because
A) non-payers can be excluded from consuming the good. B) the good is a rival good. C) the good can be produced only at a positive marginal cost. D) the free rider will not get caught.
Assume the price elasticity of demand for a good is -3. In this case, a decrease in price would result in marginal revenue of (2/3)P
Indicate whether the statement is true or false
Refer to Scenario 7.3. Which of the following combinations of inputs is on the isoquant to produce 400 units of output?
A) L = 0, K = 400 B) L = 400, K = 0 C) L = 100, K = 100 D) all of the above E) A and B, but not C