,ACCESS Test Bank for Microeconomics 9th Edition Perloff
l l l l l l l
Chapter 1 l
Introduction
◼ Chapter Outline l
1.1 Microeconomics:lThelAllocationloflScarcelResourceslT
rade-Offs
Whichlgoodslandlservicesltolproduce.
Howltolproduce.
Wholgetslthelgoodslandlservices.
WholMakeslthelDecisionslPri
ceslDeterminelAllocations
Application:lTwinkielTax
1.2 Models
Application:lIncomelThresholdlModellandlChina
SimplificationslbylAssumptionl
TestinglTheories
MaximizinglSubjectltolConstraintsl
PositivelVersuslNormative
1.3 UsesloflMicroeconomiclModels
◼ Teaching Tips l
Youlmightlbeginlthelfirstlclasslbyldiscussinglwithlthelstudentslthelroleloflthelintermediatelmicroeconomicslclassl
inlthellargerlcurriculum.lEncouragelthelstudentsltolbelinteractivelbylaskinglquestions,lbringinglinlexampleslfr
omlthelnewspaper,landlquestioninglconceptslthatlseemluntruelorlunrealistic.lForlmanylprofessors,lalprimarylg
oalloflthelcourselisltolgetlthemltolthinkllikeleconomists.lThelmateriallinlChapterl1lshouldlhelplthelstudentsltolun
derstandlwhatlislrequiredltoldolso.lYoulmightlwantltolasklyourlstudentslthe
©l2023lPearsonlEducation,lInc.
mynursytest.store
, ACCESS Test Bank for Microeconomics 9th Edition Perloff
l l l l l l l
2 Perloffl•lMicroeconomics,lNinthlEdition
policylquestionsllistedlbelowlaslalkindloflpre-
test.lSimplylasklthemltolwriteldownlthelbestlanswerltheylcanlforlnow,landlthenlputltheirlanswerslaway.lYoulcanlt
henlreturnltoltheselanswersllaterlinlthelsemester.
Somelsuggestedlpolicylquestionsl(belsureltolasklonlylquestionslthatlyoulwillladdressllaterlinlthelcourse):
1. Howldolminimumlwageslaffectlwages,lemployment,landlunemployment?
2. IslthelCPIlalgoodlmeasureloflinflation?
3. Whyldolstoreslofferlcouponslinsteadloflsimplylreducinglthelpricelbylthelvalueloflthelcoupon?
4. Whylislthelpriceloflelectricitylregulatedlinlmostlareas?
5. Whyldolsomelworkerslpreferlsetlwageslratherlthanlcommissions,levenlifltheylmightlmakelmorelwor
kinglonlcommission?
6. Agreelorldisagree:lWelshouldlstriveltolbelalzero-pollutionlsociety.
Onlalmorelpragmaticllevel,lIlstressltolthelstudentslthatlsuccesslinlthelclasslislheavilyldependentlonltheirlapproac
hltolthelmaterial.lSpecifically,lIlemphasizelthatlmemorizationlislanlextremelylineffectiveltoollforlstudyinglecon
omics,landlthatlstudentslwholmemorizelmateriallarelverylproneltolconfusionlandl“drawinglalblank”lonlexams.lIl
tryltolpersuadelthemlthatlalmuchlbetterlapproachlisltolpresslforlunderstanding.lIlalsolstresslthatlunderstandinglus
uallylcomeslonlylthroughlactivelengagementlwithlthelmaterial,lbothlinlclasslandlout.lThelproblemslinltheltext,la
slwelllasltheladditionallproblemslavailablelinlthislmanuallandlthelStudylGuide,lwilllbenefitlthelstudentslinlthislre
gard.lThelconceptuallandltechnicallquestionslthroughoutltheselproblemlsetslareldesignedltolfacilitatelstudentlun
derstanding.
Ilalsolemphasizelthelimportanceloflcomingltolclasslregularly.lPaullRomer’slarticle,l“DolStudentslGoltolClass?l
ShouldlThey?”linlthelJournalloflEconomiclPerspectivesl(vol.l7,lno.l3,lSummerl1993:167–
74)lshowslthatlperfectlclasslattendancelislworthlbetweenlonelandltwolgradelpoints,landlattendancelatlalllratherlt
hanlhalfloflclasseslislworthlbetweenl0.67landl1.24lgradelpoints.lReferringltolthislevidencelmightladdlsomelweig
htltolyourlargument.
Finally,lIlrecommendlthatlalllstudentslbringlalprotractorlandlalfewlcoloredlpencilsltolclassltolaidltheirlnoteltaki
ng.lOneloflthelmostlfrequentlproblemsloflstudentslwholarelstrugglinglislsloppyllecturelnotes.lAlprotractorlislgr
eatlforldrawingllineslandlcurveslandlhasltheladdedlbenefitloflbeingltransparent.lColoredlpencilslarelalbiglhelpl
whenlstudentslareltakinglnoteslonlgraphslwithlmanyldifferentllines,lsuchlaslincomelandlsubstitutionleffectslan
dllong-landlshort-runlcost.
Chapterl1lserveslaslanlintroductionltoltheltextlaslwelllaslalrefresherlonlsomelbasicleconomiclconceptslandldefini
tions.lThislislalgoodlchapterltolgetlstartedlonlduringlthelfirstlday,laslmostlstudentslwilllnotlhavelreadlitlbeforelcl
ass.lItlwilllgivelyoulthelopportunityltolgetlalfeelinglforlthelstudents’lrecalllofltheselbasiclconcepts.
Ilusuallylstartlbylaskinglthelclasslforlaldefinitionlofleconomics.lIflyoulgetlseverallsuggestionslthatldolnotlinclu
delthelconceptloflscarcity,lconsiderlwritinglthemlonlthelboard.lAsklthelclasslifltheylcanlthinkloflwhatlcentrallid
ealislmissinglfromltheldefinitionslgiven.lTheldiscussionloflscarcitylandlthelquestionsloflwhat,lhow,landlforlwh
omltolproducelshouldlleadlyouldirectlylintolaldiscussionloflthelroleloflpriceslaslanlallocationlmechanism.
Inltheldiscussionloflpriceslandlmarkets,lIltryltolgetlthelstudentsltolofferlexampleslfromlrecentleventslwherelpric
eslhavelrisenlorlfallenlsharply.lAnotherlpossibilitylisltolasklthelstudentslwhylsomelpriceslarelsolhighl(e.g.,lprofe
ssionallathletes’lsalaries),landlotherslarelsollowl(computerldisks).lIdeally,lyoulwilllendlup
©l2023lPearsonlEducation,lInc.
mynursytest.store
, ACCESS Test Bank for Microeconomics 9th Edition Perloff
l l l l l l l
Chapterl1lll Introduction 3
inlaldiscussionlofltheldemand-
drivenlnatureloflalmarketleconomylandlthelwayslinlwhichlsupplylandldemandlinteractltolallocatelresources.lIlals
ollikeltoltalklbrieflylaboutlmarketlfailurelandlwhylthelUnitedlStateslislalmixedleconomylratherlthanlalpurelmarketl
economy.lAldiscussionlonlthelbenefitloflinterventionlmightlencouragelthelstudentsltolconsiderlwhenlalmixedlec
onomylmightlbelbeneficial.lYoulcouldluselanlexample,lsuchlaslprimaryleducation,ltoldiscusslwhatlwouldlhappe
nlinlthelabsenceloflintervention,landlwhylthelgovernmentlmightlintervene.
Whenldiscussinglallocationloflgoodslandlservices,lanleffectivelcounterpointltolthelmarketlsystemlislconsider
ationloflthelcentrallylplannedleconomylandlthelchangeslinlEasternlEurope.lManylstudentslhavelveryllittlelkn
owledgeloflhowlcentrallylplannedleconomiesloperate,ltheldifficultiesltheylfacelinlmeetingltheldemandsloflth
eirlcitizens,landlhowltheseldifficultieslrelateltolthelcurrentlpoliticallchanges.
Theldiscussionlofleconomiclmodelslislverylimportant.lMostlstudentsldolnotlhavelalsoundlunderstandingloflthelc
onstructionlandlpurposeloflanleconomiclmodel.lStresslthelpointlthatleconomiclmodelslarelallegorieslusedltoldes
cribelbehaviorslandloutcomeslthatlwouldlotherwiselbelunnecessarilylcomplicated.lRatherlthanltryltolduplicatelt
helactuallphenomenon,leconomistsluselmodelsltolmakelpredictionslaboutlthelbehaviorloflfirmslandlindividuals.l
Perhapslthelmostlimportantlpointltolmakelregardinglmodelslislthatltheylarelsimplifiedlthroughltheluseloflassumpti
ons.lYoulmightlchooselaltypicallmarketlandldescribelthelwidelvarietyloflcomplexlinteractionslthatlwouldlhavelt
olbelquantifiedlinlorderltolproducelalcompletelmodel.lThenldescribelthelcircumstanceslunderlwhichlalverylsimpl
eleconomiclmodellcanlmakelsatisfactorylpredictionsl(wherel“satisfactory”lcanlbeldefinedlalnumberloflways,lsu
chlaslthelcoefficientlofldeterminationlinlalregressionlmodel).lYoulmaylalsolwantltoldiscusslinteractionslthatlarelt
ooldifficultltolmodel,landlwhy.lForlexample,lmodelinglbehaviorlinlunstablelpoliticallclimateslisldifficultlbecaus
eloflthellargelinfluencelofleventslthatlcannotlbelforecast.lFinally,lyoulmightldiscussltheluseloflmodelsltoltestltheo
rieslandlmakelpredictions.
Oftenlstudentslhavelalsomewhatljadedlviewlofleconomistslandltheirlpredictions.lIllikeltolpointloutlthatlwhilelpre
dictionsloftenlturnloutltolbelincorrect,lthelerrorlcanloftenlbeltracedltolincorrectlassumptionslmadelatltheltimeloflt
helprediction.lForlexample,lsupposelalforecastinglmodellislconstructedltolpredictlbaseballlgamelattendance.lAs
suminglalbrightlsunnylday,lattendancelatlalbaseballlgamelislpredictedltolbel40,000.
Iflonlyl10,000lfanslshowluplonlgamelday,litlcouldlbelthatlthelmodellislbad,lbutlitlcouldlalsolbelthatlthelweathe
rlislcoollwithlalsteadylrain.lInlthislcaselthelassumption,lnotlthelmodel,lwaslflawed.
ThelapplicationlinltheltextlconsiderslthelincomelthresholdlmodellinlChina.lStudentslareloftenlfacingllargelincre
aseslinlincomeluponlgraduation.lIlwouldlasklthemlwhatllargelpurchasesltheylplanltolmakelfollowinglgraduation
landlapplylthatlbackltolthelChinalexample.lIflallargelportionlofltheleconomylhadlallargelincomelshock,leitherlpos
itivelorlnegative,lwhatlwouldlhappenltoltheldemandlforlconsumerldurables?lIlwouldldiscusslhowlthislchangelinl
demandlmightlbeldisproportionateltolthelchangelinlincomeldueltolthelincomelthresholdlmodel.
Chapterl1lalsolintroducesltheldifferencelbetweenlpositivelandlnormativeleconomics.lItldoeslnotltakellongltolco
ver,landlalbriefldiscussionloflthislpointlislworthltheltime.lYoulmightlbeginlbylaskinglstudentsltheldistinctionlbet
weenlpositivelandlnormativelproblems.lIloftenlfindlthatlstudentsleitherldolnotlknowlatlalllorlarelverylunsurelabo
utltheirlresponses.lTolgetlthelclasslthinking,luselcurrentlsocietallproblemslasldiscussionlpoints.lAsklthelclasslwh
atlalfairlpricelforlalCovid-
19lvaccinelwouldlbe.lThelvarietyloflresponseslshowslthelnormativelnatureloflthelquestion,lbutltherelislnoldisagr
eementlthatlthelvaccinelshouldlbelproducedlinlthelleastlcostlylwaylpossiblelregardlessloflhowlthelgainslarelshar
ed.lNotelthatlmostlproblemslhavelbothlpositivelandlnormativelaspectslandlthatlbylseparatinglobjectivelissueslfr
omlsubjectivelones,lwelcanlmoreleasilylunderstandlandlapproachlthelproblemslandlfindleffectivelsolutions.lTh
eltextlexampleloflthelwisdomloflfoodlpricelcontrolslinlAfricalduringldroughtslmakeslthislpointlwell.
WhenlcoveringlSectionl1.3l(UsesloflMicroeconomiclModels),lyoulmightldrawlonlexampleslfromlyourlown
lexperiencelorlcurrentleventslthatlrequireltheluseloflmodels.lIllikeltoldrawltheldistinctionlbetweenlstructurall
modelslthatlmaylbelused,lforlexample,ltoldeterminelanlelasticitylandlforecastinglmodelslthat
©l2023lPearsonlEducation,lInc.
mynursytest.store
l l l l l l l
Chapter 1 l
Introduction
◼ Chapter Outline l
1.1 Microeconomics:lThelAllocationloflScarcelResourceslT
rade-Offs
Whichlgoodslandlservicesltolproduce.
Howltolproduce.
Wholgetslthelgoodslandlservices.
WholMakeslthelDecisionslPri
ceslDeterminelAllocations
Application:lTwinkielTax
1.2 Models
Application:lIncomelThresholdlModellandlChina
SimplificationslbylAssumptionl
TestinglTheories
MaximizinglSubjectltolConstraintsl
PositivelVersuslNormative
1.3 UsesloflMicroeconomiclModels
◼ Teaching Tips l
Youlmightlbeginlthelfirstlclasslbyldiscussinglwithlthelstudentslthelroleloflthelintermediatelmicroeconomicslclassl
inlthellargerlcurriculum.lEncouragelthelstudentsltolbelinteractivelbylaskinglquestions,lbringinglinlexampleslfr
omlthelnewspaper,landlquestioninglconceptslthatlseemluntruelorlunrealistic.lForlmanylprofessors,lalprimarylg
oalloflthelcourselisltolgetlthemltolthinkllikeleconomists.lThelmateriallinlChapterl1lshouldlhelplthelstudentsltolun
derstandlwhatlislrequiredltoldolso.lYoulmightlwantltolasklyourlstudentslthe
©l2023lPearsonlEducation,lInc.
mynursytest.store
, ACCESS Test Bank for Microeconomics 9th Edition Perloff
l l l l l l l
2 Perloffl•lMicroeconomics,lNinthlEdition
policylquestionsllistedlbelowlaslalkindloflpre-
test.lSimplylasklthemltolwriteldownlthelbestlanswerltheylcanlforlnow,landlthenlputltheirlanswerslaway.lYoulcanlt
henlreturnltoltheselanswersllaterlinlthelsemester.
Somelsuggestedlpolicylquestionsl(belsureltolasklonlylquestionslthatlyoulwillladdressllaterlinlthelcourse):
1. Howldolminimumlwageslaffectlwages,lemployment,landlunemployment?
2. IslthelCPIlalgoodlmeasureloflinflation?
3. Whyldolstoreslofferlcouponslinsteadloflsimplylreducinglthelpricelbylthelvalueloflthelcoupon?
4. Whylislthelpriceloflelectricitylregulatedlinlmostlareas?
5. Whyldolsomelworkerslpreferlsetlwageslratherlthanlcommissions,levenlifltheylmightlmakelmorelwor
kinglonlcommission?
6. Agreelorldisagree:lWelshouldlstriveltolbelalzero-pollutionlsociety.
Onlalmorelpragmaticllevel,lIlstressltolthelstudentslthatlsuccesslinlthelclasslislheavilyldependentlonltheirlapproac
hltolthelmaterial.lSpecifically,lIlemphasizelthatlmemorizationlislanlextremelylineffectiveltoollforlstudyinglecon
omics,landlthatlstudentslwholmemorizelmateriallarelverylproneltolconfusionlandl“drawinglalblank”lonlexams.lIl
tryltolpersuadelthemlthatlalmuchlbetterlapproachlisltolpresslforlunderstanding.lIlalsolstresslthatlunderstandinglus
uallylcomeslonlylthroughlactivelengagementlwithlthelmaterial,lbothlinlclasslandlout.lThelproblemslinltheltext,la
slwelllasltheladditionallproblemslavailablelinlthislmanuallandlthelStudylGuide,lwilllbenefitlthelstudentslinlthislre
gard.lThelconceptuallandltechnicallquestionslthroughoutltheselproblemlsetslareldesignedltolfacilitatelstudentlun
derstanding.
Ilalsolemphasizelthelimportanceloflcomingltolclasslregularly.lPaullRomer’slarticle,l“DolStudentslGoltolClass?l
ShouldlThey?”linlthelJournalloflEconomiclPerspectivesl(vol.l7,lno.l3,lSummerl1993:167–
74)lshowslthatlperfectlclasslattendancelislworthlbetweenlonelandltwolgradelpoints,landlattendancelatlalllratherlt
hanlhalfloflclasseslislworthlbetweenl0.67landl1.24lgradelpoints.lReferringltolthislevidencelmightladdlsomelweig
htltolyourlargument.
Finally,lIlrecommendlthatlalllstudentslbringlalprotractorlandlalfewlcoloredlpencilsltolclassltolaidltheirlnoteltaki
ng.lOneloflthelmostlfrequentlproblemsloflstudentslwholarelstrugglinglislsloppyllecturelnotes.lAlprotractorlislgr
eatlforldrawingllineslandlcurveslandlhasltheladdedlbenefitloflbeingltransparent.lColoredlpencilslarelalbiglhelpl
whenlstudentslareltakinglnoteslonlgraphslwithlmanyldifferentllines,lsuchlaslincomelandlsubstitutionleffectslan
dllong-landlshort-runlcost.
Chapterl1lserveslaslanlintroductionltoltheltextlaslwelllaslalrefresherlonlsomelbasicleconomiclconceptslandldefini
tions.lThislislalgoodlchapterltolgetlstartedlonlduringlthelfirstlday,laslmostlstudentslwilllnotlhavelreadlitlbeforelcl
ass.lItlwilllgivelyoulthelopportunityltolgetlalfeelinglforlthelstudents’lrecalllofltheselbasiclconcepts.
Ilusuallylstartlbylaskinglthelclasslforlaldefinitionlofleconomics.lIflyoulgetlseverallsuggestionslthatldolnotlinclu
delthelconceptloflscarcity,lconsiderlwritinglthemlonlthelboard.lAsklthelclasslifltheylcanlthinkloflwhatlcentrallid
ealislmissinglfromltheldefinitionslgiven.lTheldiscussionloflscarcitylandlthelquestionsloflwhat,lhow,landlforlwh
omltolproducelshouldlleadlyouldirectlylintolaldiscussionloflthelroleloflpriceslaslanlallocationlmechanism.
Inltheldiscussionloflpriceslandlmarkets,lIltryltolgetlthelstudentsltolofferlexampleslfromlrecentleventslwherelpric
eslhavelrisenlorlfallenlsharply.lAnotherlpossibilitylisltolasklthelstudentslwhylsomelpriceslarelsolhighl(e.g.,lprofe
ssionallathletes’lsalaries),landlotherslarelsollowl(computerldisks).lIdeally,lyoulwilllendlup
©l2023lPearsonlEducation,lInc.
mynursytest.store
, ACCESS Test Bank for Microeconomics 9th Edition Perloff
l l l l l l l
Chapterl1lll Introduction 3
inlaldiscussionlofltheldemand-
drivenlnatureloflalmarketleconomylandlthelwayslinlwhichlsupplylandldemandlinteractltolallocatelresources.lIlals
ollikeltoltalklbrieflylaboutlmarketlfailurelandlwhylthelUnitedlStateslislalmixedleconomylratherlthanlalpurelmarketl
economy.lAldiscussionlonlthelbenefitloflinterventionlmightlencouragelthelstudentsltolconsiderlwhenlalmixedlec
onomylmightlbelbeneficial.lYoulcouldluselanlexample,lsuchlaslprimaryleducation,ltoldiscusslwhatlwouldlhappe
nlinlthelabsenceloflintervention,landlwhylthelgovernmentlmightlintervene.
Whenldiscussinglallocationloflgoodslandlservices,lanleffectivelcounterpointltolthelmarketlsystemlislconsider
ationloflthelcentrallylplannedleconomylandlthelchangeslinlEasternlEurope.lManylstudentslhavelveryllittlelkn
owledgeloflhowlcentrallylplannedleconomiesloperate,ltheldifficultiesltheylfacelinlmeetingltheldemandsloflth
eirlcitizens,landlhowltheseldifficultieslrelateltolthelcurrentlpoliticallchanges.
Theldiscussionlofleconomiclmodelslislverylimportant.lMostlstudentsldolnotlhavelalsoundlunderstandingloflthelc
onstructionlandlpurposeloflanleconomiclmodel.lStresslthelpointlthatleconomiclmodelslarelallegorieslusedltoldes
cribelbehaviorslandloutcomeslthatlwouldlotherwiselbelunnecessarilylcomplicated.lRatherlthanltryltolduplicatelt
helactuallphenomenon,leconomistsluselmodelsltolmakelpredictionslaboutlthelbehaviorloflfirmslandlindividuals.l
Perhapslthelmostlimportantlpointltolmakelregardinglmodelslislthatltheylarelsimplifiedlthroughltheluseloflassumpti
ons.lYoulmightlchooselaltypicallmarketlandldescribelthelwidelvarietyloflcomplexlinteractionslthatlwouldlhavelt
olbelquantifiedlinlorderltolproducelalcompletelmodel.lThenldescribelthelcircumstanceslunderlwhichlalverylsimpl
eleconomiclmodellcanlmakelsatisfactorylpredictionsl(wherel“satisfactory”lcanlbeldefinedlalnumberloflways,lsu
chlaslthelcoefficientlofldeterminationlinlalregressionlmodel).lYoulmaylalsolwantltoldiscusslinteractionslthatlarelt
ooldifficultltolmodel,landlwhy.lForlexample,lmodelinglbehaviorlinlunstablelpoliticallclimateslisldifficultlbecaus
eloflthellargelinfluencelofleventslthatlcannotlbelforecast.lFinally,lyoulmightldiscussltheluseloflmodelsltoltestltheo
rieslandlmakelpredictions.
Oftenlstudentslhavelalsomewhatljadedlviewlofleconomistslandltheirlpredictions.lIllikeltolpointloutlthatlwhilelpre
dictionsloftenlturnloutltolbelincorrect,lthelerrorlcanloftenlbeltracedltolincorrectlassumptionslmadelatltheltimeloflt
helprediction.lForlexample,lsupposelalforecastinglmodellislconstructedltolpredictlbaseballlgamelattendance.lAs
suminglalbrightlsunnylday,lattendancelatlalbaseballlgamelislpredictedltolbel40,000.
Iflonlyl10,000lfanslshowluplonlgamelday,litlcouldlbelthatlthelmodellislbad,lbutlitlcouldlalsolbelthatlthelweathe
rlislcoollwithlalsteadylrain.lInlthislcaselthelassumption,lnotlthelmodel,lwaslflawed.
ThelapplicationlinltheltextlconsiderslthelincomelthresholdlmodellinlChina.lStudentslareloftenlfacingllargelincre
aseslinlincomeluponlgraduation.lIlwouldlasklthemlwhatllargelpurchasesltheylplanltolmakelfollowinglgraduation
landlapplylthatlbackltolthelChinalexample.lIflallargelportionlofltheleconomylhadlallargelincomelshock,leitherlpos
itivelorlnegative,lwhatlwouldlhappenltoltheldemandlforlconsumerldurables?lIlwouldldiscusslhowlthislchangelinl
demandlmightlbeldisproportionateltolthelchangelinlincomeldueltolthelincomelthresholdlmodel.
Chapterl1lalsolintroducesltheldifferencelbetweenlpositivelandlnormativeleconomics.lItldoeslnotltakellongltolco
ver,landlalbriefldiscussionloflthislpointlislworthltheltime.lYoulmightlbeginlbylaskinglstudentsltheldistinctionlbet
weenlpositivelandlnormativelproblems.lIloftenlfindlthatlstudentsleitherldolnotlknowlatlalllorlarelverylunsurelabo
utltheirlresponses.lTolgetlthelclasslthinking,luselcurrentlsocietallproblemslasldiscussionlpoints.lAsklthelclasslwh
atlalfairlpricelforlalCovid-
19lvaccinelwouldlbe.lThelvarietyloflresponseslshowslthelnormativelnatureloflthelquestion,lbutltherelislnoldisagr
eementlthatlthelvaccinelshouldlbelproducedlinlthelleastlcostlylwaylpossiblelregardlessloflhowlthelgainslarelshar
ed.lNotelthatlmostlproblemslhavelbothlpositivelandlnormativelaspectslandlthatlbylseparatinglobjectivelissueslfr
omlsubjectivelones,lwelcanlmoreleasilylunderstandlandlapproachlthelproblemslandlfindleffectivelsolutions.lTh
eltextlexampleloflthelwisdomloflfoodlpricelcontrolslinlAfricalduringldroughtslmakeslthislpointlwell.
WhenlcoveringlSectionl1.3l(UsesloflMicroeconomiclModels),lyoulmightldrawlonlexampleslfromlyourlown
lexperiencelorlcurrentleventslthatlrequireltheluseloflmodels.lIllikeltoldrawltheldistinctionlbetweenlstructurall
modelslthatlmaylbelused,lforlexample,ltoldeterminelanlelasticitylandlforecastinglmodelslthat
©l2023lPearsonlEducation,lInc.
mynursytest.store
