Economists believe that
a. people who choose to promote the interests of others cannot be acting rationally in their own self-interest
b. people show concern only for those whom they know personally
c. charitable donations would disappear if tax deductions for charitable giving were eliminated
d. the notion of self-interest rules out concern for others
e. concern for the welfare of others is consistent with the concept of self-interest
E
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Could pollution be eliminated by banning all activities harmful to the environment?
A) No, because legislation is influenced by industrial lobbyists. B) No, because the cost of doing so would be higher than even the most dedicated environmentalist would agree to accept. C) Not until we have better information on the sources of pollution. D) Yes, if we are willing to place long-run considerations ahead of short-run profits.
If the real risk-free interest rate falls, the:
a. Demand curve for real loanable funds rises. b. Demand curve for real loanable funds falls. c. Supply curve of real loanable funds rises. d. None of the above.
Mel is thinking of going on a cruise. Mel values a cruise in nice weather at $2,000 and values a cruise in bad weather at $50. The probability of nice weather is 60 percent and the probability of bad weather is 40 percent. Trip insurance is sometimes available. If purchased, it allows travelers to delay the cruise until the weather is nice. Suppose that the price of the cruise is $1,200. If Mel is risk-neutral, then Mel should:
A. only buy trip insurance if it costs less than $20. B. not buy trip insurance. C. only buy trip insurance if it costs less than $780. D. only buy trip insurance if it costs less than $50.
People will buy more of a normal good when their income decreases.
Answer the following statement true (T) or false (F)