Traditional economics argues that people know what they want better than anyone else, and this justifies the traditionalists' concentration on maximizing people's consumption.
Answer the following statement true (T) or false (F)
True
Rationality is an assumption of traditional economic models.
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Self-interest makes cartels unstable for all of the following reasons except which one?
A) Each firm has an incentive to be the whistle-blower. B) Each firm has the incentive to produce more than the agreed upon quantity. C) Each firm has the incentive to lower their costs by producing less than the agreed upon quantity. D) Each firm has an incentive to be the first to report and confess cartel behavior.
In the above figure, if the economy is in equilibrium at E1, then
A) the economy is producing below its potential long-run equilibrium at full employment. B) the economy is producing above its potential long-run equilibrium at full employment. C) there is an inflationary gap in the economy. D) the economy is in a period of high inflation.
Facebook and Google were responsible for over 60 percent of digital advertising expenditures in 2017.
Answer the following statement true (T) or false (F)
An economy operating inefficiently is graphed as a point ______ the production possibilities curve.
a. above
b. inside
c. outside
d. on