By using the ceteris paribus assumption in conjunction with a model, economists can
A) suspend the rationality assumption.
B) avoid having their model depend on any additional assumptions.
C) hold certain factors constant.
D) be sure that the model will predict correctly.
Answer: C
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Sheila is on a temporary layoff from her automobile factory job but has not looked for work in the last four weeks. The Bureau of Labor Statistics counts Sheila as
a. unemployed and in the labor force. b. unemployed and not in the labor force. c. employed and in the labor force. d. employed and not in the labor force.
Mary says, "You would have to pay me $50 to attend that pro wrestling event." For Mary, the marginal utility of the event is:
A. zero. B. positive, but declines rapidly. C. negative. D. positive, but less than the ticket price.
The consumption function shows how much
A. households plan to consume per year at each level of savings. B. real disposable income people will earn at each income tax bracket. C. households plan to consume per year at each level of real disposable income. D. households plan to consume per year at each possible interest rate.
According to the text, everyone shouts at a party in order to be heard. If instead everyone spoke at a normal volume people would still be heard, but people continue to shout because:
A. shouting can be sustained using a tit-for-tat strategy. B. shouting is a dominated strategy. C. the payoff matrix is unknown to the people at a party. D. shouting is a dominant strategy.