Economic models are:
A) created and used in order to duplicate virtually every aspect of the real world.
B) useless if they are simple.
C) made generally of wood, plastic, and/or metal.
D) built using assumptions.
Ans: D) built using assumptions.
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Which of the following is an example of a positive economic statement?
a. The economy's real output increased at about 3 percent last year and the unemployment rate decreased. b. A central bank should not print too much money because inflation could result. c. Congress should stabilize the social security system by raising taxes now. d. The government farm products surplus should be distributed to the needy.
Which of the following is most likely to be an implicit cost for Company X?
A. Rental payments on IBM equipment B. Transportation costs paid to a nearby trucking firm C. Forgone rent from the building owned and used by Company X D. Payments for raw materials purchased from Company Y