Which expression below matches most closely the way economists go about testing their models?
A) "Consistency is the hobgoblin of small minds."
B) "Seeing the results is the only way to know if you are right."
C) "A bird in the hand is worth two in the bush."
D) "In the long run, we are all dead."
Answer: B
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Persons who do not hold a job, but are actively seeking work are considered: a. out of the labor force
b. unemployed. c. unemployable, and not counted in official statistics. d. underemployed.
If the market for a good is initially in equilibrium and there is a rightward shift of the demand curve, then
a. the equilibrium price will fall b. there will be a rightward movement along the supply curve c. the supply curve will also shift to the right d. the supply curve will shift to the left e. the demand curve will shift back as consumers react to the higher equilibrium price
The use of money contributes to economic efficiency because:
A. governmental direction of the production and distribution of output can be avoided by using money. B. roundabout production could not occur without the availability of money. C. it is necessary for the creation of capital goods. D. it promotes specialization by overcoming the problems with barter.
The profit-maximizing output of a pure monopoly is not socially optimal because in equilibrium:
A. price equals minimum average total cost. B. marginal revenue equals marginal cost. C. marginal cost exceeds price. D. price exceeds marginal cost.