Economists assume that rational people
A) never use all available information as they act to achieve their goals.
B) undertake activities that benefit others and hurt themselves.
C) only weigh the benefits and costs of the most desirable alternative actions.
D) respond to economic incentives.
Answer: D
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In the short run, which of the following is likely to be a variable cost to a physician?
a. office space b. computers c. liability insurance d. insurance forms e. examining table
According to the paradox of thrift, when people try to save more, this causes
a. intended investment to automatically rise to match the change in the increased level of saving b. national income to rise causing saving to rise c. levels of income to remain unchanged causing saving levels to rise d. saving to be greater than intended investment, which causes national income to fall, causing saving to remain constant or actually fall e. saving to be less than investment, which causes national income to rise causing saving to rise
A statement describing how the world is
a. is a normative statement. b. is a positive statement. c. would only be made by an economist speaking as a policy adviser. d. would only be made by an economist employed by the government.
A firm should continue to operate even at a loss in the short run if:
A. Its output is above the break-even point B. Its revenues are less than its fixed costs C. It can cover its variable costs and some of its fixed costs D. It has some fixed costs that cannot be brought down to zero