An economic model is
a. a concrete representation of reality
b. as close to reality as possible
c. too abstract to be useful when assumptions are involved
d. unrelated to reality
e. an abstract representation of reality
E
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The price elasticity of supply equals the percentage change in the
A) quantity demanded divided by the percentage change in the price of a substitute or complement. B) quantity supplied divided by the percentage change in price. C) quantity demanded divided by the percentage change in price. D) supply divided by the percentage change in the demand. E) quantity supplied divided by the percentage change in the quantity demanded.
Real business cycle and new Keynesian models disagree upon
a. whether people form their expectations rationally. b. whether changes in unemployment are voluntary or involuntary. c. whether individuals engage in optimizing behavior at all times. d. whether changes in the money supply affect output in the long-run.
The increase in output that is generated by an additional unit of input is called the:
A. input-output relationship. B. production function. C. resource product. D. marginal product.
The use of abstraction in economic analysis is one of its primary weaknesses.
Answer the following statement true (T) or false (F)