Assumptions Are Necessary to

question 109

Multiple Choice

Assumptions are necessary to

• A) make economics a social science.
• B) define a set of circumstances where a model is most likely to apply.
• C) define the relationship between wants and resources under all circumstances.
• D) define the specific cause and effect relationship that is being explained by social sciences.

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Definitions:

Pure Competition

A market structure characterized by a large number of firms, all producing identical products, and no single firm has any influence over market price.

Extra Unit

The additional quantity of a product or service that is produced or provided.

Purely Competitive Firm

A company operating in a market where there are many buyers and sellers, all selling identical products, and no single buyer or seller can influence the market price.

Total Revenue

The cumulative financial gain a company secures from its commercial activities, including sales and services, within a particular duration.