Economic Models Assignment | Homework For You

1.Select the best statement about economic models.

a. An economic model is evaluated based on the realism of its assumptions.

b. An economic model should not generate predictions about actual events in the real world, since it discusses only abstract events.

c. An economic model will be discarded if its predictions are often in conflict with the facts.

d. Economic models are all false.

2.Anytime one purchases a ticket in advance of an event, if the ticket is non-refundable andnon-transferable then on the day of the event

a. the ticket is part of the cost of going.

b. the ticket is a variable cost.

c. the ticket is part of the cost of going if it was expensive.

d. the ticket is a sunk cost and should pay no role in the decision to go or not

e. the ticket is a fixed cost but not a sunk cost.

3.Specialization of labor not only results in the ability to produce a larger amount of goods due to innate differences in people’s skills, but also by:

a. rigidly segmenting work.

b. switching back and forth among numerous tasks,

c. breaking a task down into mind. numbing repetitive tasks.

d. deepening

4.Refer to the above table. Craig possess an absolute advantage in:

a. the production of shoes.

b.  neither shoe nor pant production.

c. the production of pants.

d. both shoe and pants production.

e. pants and possibly shoe production.

5.Refer to the above table. Jenny’s opportunity cost of producing an extra pair of pants is:

a. 1 pair of shoes.

b. 1.5 pairs of shoes.

c. 2 pairs of shoes.

d. 2.5 pairs of shoes.

e. 3 pairs of shoes.

6.Refer to the above table. Craig’s opportunity cost of producing an extra pair of shoes is:

a. 0.75 pairs of pants.

b. 0.90 pairs of pants,

c. I pair of pants.

d. 1.25 pairs of pants

d. 1.33 pairs of pants.

7.Refer to the above table. Based on their comparative advantages, Craig should specialize inproducing while Jenny should specialize in producing

a. shoes; pants

b. both; neither

c. neither; both

d. pants; shoes

e. pants; pants

8.Refer to the above diagram, illustrating the demand, for guitars. An increase in price of guitars would bring about a movement from:

a. Point B to Point C.

b. Point B to Point A.

c. Point D1, to Point D0

d. Point D1, to PointD2.

9.Refer to the above diagram, illustrating the demand for guitars. A successful advertising campaign to sell guitars would bring about a movement from:

a. Point B to Point C.

b. Point B to Point A

c. Point D1, to Point Do.

d. Point D1, to Point D2

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