In Constructing Models, Economists

question 240

Multiple Choice

In constructing models, economists

• A)include all independent variables.
• B)include all available information.
• C)attempt to duplicate the real world.
• D)make simplifying assumptions.

---

Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers at those prices.

Marginal Revenue

The increase in income resulting from the sale of one extra product or service unit.

Natural Monopoly

A market condition where a single firm can supply a product or service at a lower cost than any potential competitor, often due to economies of scale.

Cheaper Service

A service offered at a lower price relative to other similar services, emphasizing cost-effectiveness.