The basic purpose of economic models is to:
a. construct simplifying assumptions about the real world.
b. explain reality in all its complexity.
c. construct situations where controlled experiments can be carried out.
d. provide explanations for, and predictions of the relationship between variables.
Question 2
Which of the following questions would not be studied by a microeconomist but would be studied by a macroeconomist?
a. Why do national economies grow?
b. What percentage of consumer income is spent on entertainment?
c. Why do workers prefer the 4-day workweek?
d. How is the electric industry harmed by the passage of new clean air legislation?
