Economists Use Assumptions in Order to

question 11

Multiple Choice

Economists use assumptions in order to

• A) Make models more realistic
• B) Simplify complex real-world behavior
• C) Make their models fit the data
• D) Avoid using mathematics

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Definitions:

Marginal Revenue Product

The additional revenue generated by employing one more unit of input, such as labor, in the production process.

Resource

An input used in the production of goods or services, such as labor, land, capital, and technology.

Units

A standard quantity or measurement used to express the quantity of a product or dimension of a measure.

Purely Competitive Market

A market structure where no single buyer or seller has the power to influence prices, and products are perfectly substitutable.