What branch of economics involves the collection and use of data to test economic theories? Why is this task often more difficult in economics than it is in physical sciences?
What will be an ideal response?
The branch of economics that involves the collection and use of data to test economic theories is called empirical economics. This is often more difficult in economics than in the physical sciences because economists rarely are able to set up controlled experiments.
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Refer to Figure 7-2. At the market equilibrium, the deadweight loss is equal to
A) $0. B) $500,000. C) $1,000,000. D) $2,000,000.
A firm will shut down in the short run when
A) price is below average total costs at all possible rates of output. B) price is below average variable costs at all possible rates of output. C) price is below marginal cost at all possible rates of output. D) it is making a loss.
When airlines post prices on an electronic bulletin board at 8:00 a.m. each morning, the decision-makers are engaged in
a. a single play game b. a sequential game c. an entry decision d. a simultaneous game e. an infinite repetition game
One consequence of raising tax rates is that it
a. provides an added incentive to work b. provides less incentive to participate in the underground economy c. always increases total tax revenues d. leads to less underreporting of income e. leads to more underreporting of income