Which is NOT true about the use of economic models?
A) Economic models are simplified representations of the real world.
B) Economists always use experiments in science laboratories to test their theories.
C) Economists use what has already happened in the real world to test their theories.
D) Economists are employed to explain economic phenomena but are never used to predict what might happen next.
Question 2
Refer to the above figures. A positive externality exists that has not been corrected. Price and quantity will be
A) P1 and Q1.
B) P2 and Q2.
C) P3 and Q3.
D) P4 and Q4.
