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What is the purpose of models in economics? What are the two economic models presented in chapter two?
Significant Costs
Expenses that are sufficiently large to impact an entity's financial decisions or financial statements.
Externalities
Economic impacts of a product or service on parties who do not directly participate in the transaction, which can be negative (pollution) or positive (vaccination benefits).
Referent Power
A form of influence based on the charisma and interpersonal appeal of the leader, rather than on formal authority.
Positive Relationship
A connection between two or more entities characterized by mutual respect, cooperation, and beneficial outcomes for all involved.
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