Economists Often Evaluate a Theory in Terms of How Consistently

question 21

Multiple Choice

Economists often evaluate a theory in terms of how consistently and accurately it predicts what happens.Implicit in this position is the belief that

• A) if the theory's predictions are consistently accurate,then there is a fairly good chance that the theory is a good explanation of how things work.
• B) if the theory's predictions are consistently accurate,then there is a fairly good chance that the theory will be accepted by others.
• C) if the theory's predictions are consistently accurate,then there is a fairly good chance that the theory's assumptions (even if they initially seem unrealistic)capture something that is essential to explaining what it is that the theory is trying to explain.
• D) all of the above

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Definitions:

Sales Estimates

Sales estimates are projections of the amount of revenue that will be generated through sales activities in a future period.

Budgeted Cost

Estimated costs associated with manufacturing a product, conducting a project, or running a department during a specific period.

Goods Manufactured

The total value or volume of products completed and ready for sale during a specific accounting period.

Work in Process Inventory

Inventory that includes the raw materials, labor, and overhead costs for products that are in the production process but not yet completed.