Economists usually assume that people act in a rational, self-interested way. In explaining how consumers make choices this means that economists believe
A) consumers will spend their incomes and time on activities that benefit themselves as much as possible, without regard to the welfare of others.
B) consumers spend their incomes to order to accumulate the most goods and services.
C) consumers make choices that will leave them as satisfied as possible given their incomes, tastes, and the prices of goods and services available to them.
D) consumers will always buy goods and services at the lowest possible prices.
C
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Which of the following is TRUE regarding business cycles?
I. Cycles are predictable. II. In each cycle, a peak follows an expansion. III. Potential GDP fluctuates around real GDP. A) I and II B) I and III C) II and III D) II only
"Tips" published in leading commercial or financial publications are unlikely to lead to profitable trades because
A) only wealthy individuals can buy stocks in the volume necessary to take advantage of tips. B) whatever is gained by trading on the basis of tips will be taxed away by the government. C) the news will already be reflected in the market prices of the assets. D) the news contained in the tips is usually inaccurate.
Suppose the price elasticity of demand for iPods is inelastic. What would you expect about the demand elasticity for workers producing iPods? Explain
What will be an ideal response?
Refer to the data. How many units of the two products will the rational consumer purchase?
Answer the question on the basis of the following total utility data for products L and M. Assume that the prices of L and M are $3 and $4 respectively and that the consumer's income is $18.
A. 3 of L and none of M
B. 4 of L and 2 of M
C. 3 of L and 5 of M
D. 2 of L and 3 of M