Which of the Following Statements About Economic Models Is TRUE

question 188

Multiple Choice

Which of the following statements about economic models is TRUE?

• A) Economic models are not empirically testable.
• B) The predictive power of models is not as important as they serve the preferences of economists.
• C) Economic models are designed so that every detail of the real world can be analyzed.
• D) Every economic model is based on a set of assumptions.

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Definitions:

Cost Per Unit

The total expense incurred to produce, store, and sell one unit of a product or service, calculated by dividing total costs by the number of units produced.

Inventory

The complete list of goods or materials a company holds, intending to sell it in the regular course of business.

Conversion Costs

The combined costs of direct labor and manufacturing overheads that are incurred to convert raw materials into finished goods.

Raw And In Process

Materials that are either in their natural state and used in the manufacturing of products or materials that are partially processed but not yet completed.