Midterm.docx - Question1 3/3pts . Microeconomics, behave...

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Question 1 3 / 3 pts A friend mentions that he wants to learn more about recessions and how the  unemployment level is affected. Which course would you recommend for him?   Microeconomics, because microeconomists study how individual decision-making units  behave.   Macroeconomics, because macroeconomists study aggregate economic behavior.   Economic history, because it covers the development of the modern economy.   Public economics, because it covers how government can affect economic behavior. Aggregate measures are Macroeconomics issues.   Question 2 3 / 3 pts A normative statement evaluates    what ought to be.      what is.      what will be.      what was.  
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Definition of normative statement.   Question 3 3 / 3 pts Economists use the device of ceteris paribus in order to   abstract from reality and focus on the two variables of interest.    include all variables that may affect a given outcome.      make their models better fit reality.     take into account the variables that affect the outcome of a model. Ceteris paribus allows economists to focus on the variables of interest and ignore other  objects that may affect an outcome.   Question 4 3 / 3 pts A movie production company is considering making a sequel to one of their most  popular films of 2009. In their decision, should they consider the cost of the original film  or just the sequel?   They should consider just the cost of the sequel because the cost of the original film is a sunk cost. The only cost that is important here is the marginal cost, or the cost of the  sequel.   They should consider just the cost of the sequel because the cost of the original film has already been covered by the revenue of the original film.  
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They should consider the cost of both films because the revenues from the sequel will  cover part of the original cost.   They should consider the cost of both films because the cost of the sequel will likely be  less than the cost of the original film. The cost of the original film is sunk. The cost of the sequel must be covered by the  revenue from the sequel in order for the production company to be willing to make the  sequel.   Question 5 3 / 3 pts Suppose that Noah is very good at typing and Emma is better at filing. However, Noah  is assigned to a filing task while Emma is assigned to a typing task. An economist would say that this is a(n. _____________ allocation.
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