Refer to the scenario above. Which of the following statements is true about the model?
A) The model is not based on any assumption.
B) The predictions of the model will hold for every individual.
C) The model describes the economic payoff of more education.
D) The model can be applied for maximum 10 years of additional education.
C
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If nominal GDP increases by 4 percent, then
a. real output has increased by 4 percent b. the price level has increased by 4 percent c. consumer spending must have increased by 4 percent d. it is possible that all of the increase was caused by an increase in the price level e. net exports increased by 4 percent
Shazam, a maker of magic wands, is selling in a purely competitive market. Its output is 500 wands, which sell for $10 each. At this level of output, the marginal cost is $10 and the average variable cost is $12. Should the firm increase output,
decrease output, or not produce? Why? What will be an ideal response?