A critical assumption differs from a simplifying assumption in that a critical assumption
a. is a means of getting rid of extraneous details in the model
b. cannot affect the conclusions of the model
c. can affect the conclusions of the model
d. is rarely used in economic models
e. is never a fundamental assumption
C
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The effects of the national health care program on goods and services markets will
A) increase the marginal cost of the firm. B) increase the quantity produced of the firm. C) consumers will pay lower prices for many goods and services. D) decrease the quantity demanded for all goods and services.
A firm started promoting its product through advertising. This changed the product's elasticity from -1.08 to -0.99 . The firm should
a. Lower prices as the demand is more elastic b. Lower prices as the demand is more inelastic c. Raise prices as the demand is more elastic d. Raise prices as the demand is more inelastic