When Studying the Effects of Public Policy Changes, What Do

question 79

Multiple Choice

When studying the effects of public policy changes, what do economists do?

• A) They often falsify results if the desired effect is not reached.
• B) They may make different assumptions for the long run and the short run.
• C) They attempt to consider only the direct effects and not the indirect effects.
• D) They can immediately change policies if they are ineffective.

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Definitions:

Capital Input

The amount of capital goods used in the production process, influencing the output.

Competitive Firms

Companies that operate in a market where there are many buyers and sellers, and they have no control over the market price of their product.

Marginal Product

The additional output generated by adding one more unit of a specific input, holding all other inputs constant.

Profit-maximizing

A strategy or approach aimed at achieving the highest possible profit from business operations, often through cost management and optimal pricing.