Which of the following is NOT an alleged "unrealistic" assumption that proponents of behavioral economics suggest are commonly utilized in traditional economic models based on the rationality assumption?
A. unbounded will power
B. unbounded selfishness
C. unbounded resources
D. unbounded rationality
Answer: C
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In drawing a straight-line production possibilities curve for an economy that produces oil and corn, we assume that resources (for example, the number of labor hours)
a. are fixed b. increase at a constant rate c. increase at an increasing rate d. increase at a decreasing rate e. are not uniform, such as a variety of skills and quality of work
If marginal cost is ______ average cost, then average cost will _____.
A. equal to; decrease B. less than; increase C. greater than; decrease D. greater than; increase
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and current international transactions in the context of the Three-Sector-Model?
a. Real GDP rises, and current international transactions become more positive (or less negative). b. There is not enough information to determine what happens to these two macroeconomic variables. c. Real GDP rises, and current international transactions remain the same. d. Real GDP falls, and current international transactions become more negative (or less positive). e. Real GDP and current international transactions remain the same.
The aggregate supply curve tells us
A. what the effect of changes in interest rates will be on real GDP. B. the total amount of planned production in an economy. C. how changes in the price level affect the amount paid for all commodities. D. anything about the quantity demanded of all commodities and the price level.