Traditional economists prefer simpler models because they give clear-cut results that can better highlight certain important insights.
Answer the following statement true (T) or false (F)
True
Traditional economists recognize that their models are far too simple to describe all reality but argue that they highlight certain important insights that other, more complicated models miss.
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If R2 is less than 1
A) the regression analysis is incorrect. B) the observation data is suspect. C) some observations do not lie on the regression line. D) the probability of having the correct fit is very low.
A corporation may be reluctant to raise capital by issuing stock because
a. issuing stock to obtain money for investment is riskier than selling bonds. b. holders of already-existing stock will gain more voting power in the corporation. c. obtaining government permission to issue stock can be time-consuming and expensive. d. All of the above are correct.
The benefit estimation method employed by Carson and Mitchell in their analysis of the Clean Water Act was
a. the travel cost method (TCM) b. the contingent valuation method (CVM) c. the averting expenditure method (AEM) d. the hedonic price method (HPM)
What do economists mean when they state that a good is scarce?
What will be an ideal response?