Economic Models Must

question 62

Multiple Choice

Economic models must

• A) be completely realistic to be useful.
• B) include all relationships that exist in the relevant issue to be modeled.
• C) completely represent the real world.
• D) rely on the ceteris paribus assumption.

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Definitions:

Fixed Cost

Fixed costs are business expenses that remain constant regardless of the level of production or sales, such as rent or salaries.

Patent

A form of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a certain number of years.

Pigeon Pies

Traditional British pies made with pigeon meat, often served as a game dish.

Output

The aggregate production of merchandise or services by a corporation, sector, or economy.