Identify and describe each step of the five-step process outlined in the textbook for building and testing theories
The first step in building and testing theories for economists is to make an observation or have a thought. This then leads to the second step which is to ask a question based on the observation. The third step involves building a theory to try to answer the question. Step four involves making predictions based on the theory. The final step is to test the theory by gathering and analyzing data.
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Which of the following is TRUE about firms organized along functional lines?
a. Workers find it difficult to develop functional expertise b. Workers find it difficult to share information within their division c. They foster the exploitation of economies of scale d. All of the above
A fall in the price of a good causes an increase in its:
a. quantity demanded. b. demand. c. quantity supplied. d. supply.
The price for loanable funds is the interest rate.
Answer the following statement true (T) or false (F)
Which of the following is most likely to benefit from government established price floors in agriculture?
A) large farm owners and corporate farms B) small farmers C) cattle ranchers D) low income farmers