Which of the following statements about economic models is TRUE?
A) Economic models are not empirically testable.
B) The predictive power of models is not as important as they serve the preferences of economists.
C) Economic models are designed so that every detail of the real world can be analyzed.
D) Every economic model is based on a set of assumptions.
Answer: D
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The supply of product X is inelastic (but not perfectly inelastic) if
A. an 8% increase in price generates an 8% increase in quantity supplied. B. a 10% decrease in price does not affect quantity supplied. C. a 7% decrease in price generates a 5% decrease in quantity supplied. D. a 5% increase in price generates a 7% increase in quantity supplied.
Jake just bought a new hockey stick. When he was leaving the shop, he thought that he such a great deal and would have paid $50 more dollars for the stick. Jake received
A) producer surplus. B) equilibrium. C) marginal cost. D) total surplus. E) consumer surplus.
If per capita GDP were distributed across the United States, each individual would receive:
A. Their current income divided by the U.S. population. B. The market value of final goods and services produced in the U.S. per year. C. The value of total world output divided by the population. D. The market value of final goods and services produced in the U.S. per year divided by the population.
The opportunity cost of a new national park is the:
A. cost of hiring staff and park rangers to provide services for visitors. B. alternative uses for the land and funding for the park. C. increased pollution to the wildlife habitat at the park. D. cost of constructing park buildings and highways to get to it.