Microeconomic models are used to
A) make predictions.
B) explain real-life phenomena.
C) evaluate policy alternatives.
D) All of the above.
D
You might also like to view...
Market equilibrium occurs when
A) other things remain the same. B) the market is changing rapidly. C) the quantity demanded equals the quantity supplied. D) buyers get the lowest possible price. E) everyone who wants the good gets the quantity he or she wants.
Assume that the interest rate on a federally insured deposit declines from 15 percent per annum to 10 percent. If an individual holding a U.S. Treasury bill worth $2,500 plans to sell it after this drop in interest rate, he would realize (approximately) a:
a. capital gain worth $99. b. capital loss worth $100. c. capital gain worth $100. d. capital loss worth $99.
Entry of new firms in a decreasing-cost industry leads to an upward shift of the LRAC curve.
Answer the following statement true (T) or false (F)
If an economy is operating at a point inside the production possibilities frontier, then
a. some of the nation's resources are unemployed b. the production decisions are made by the government c. unlimited resources must satisfy scarce desires d. there is a scarcity of human resources relative to human wants therefore society must have some mechanism for making choices e. society is paying too much for wages