Author Question: Refer to the above figures. An external cost exists. This will lead to a(n) A) underproduction ... (Read 32 times)

Tazate · **on:** Jun 29, 2018

Refer to the above figures. An external cost exists. This will lead to a(n)

A) underproduction equal to Q1 minus Q2.
B) overproduction equal to Q4 minus Q3.
C) underproduction equal to Q4 minus Q3.
D) overproduction equal to Q1 minus Q2.

Question 2

Which of the following statements concerning economic models is FALSE?

A) Economic models must provide usable predictions.
B) Economic models are based on pure fact and no assumptions.
C) Economic models are tested empirically.
D) Economic models relate to how people behave.