Can activities like driving faster than the speed limit or driving without wearing a seat belt be considered rational behavior? Why or why not?
These activities would be considered rational if the perceived benefits are greater than the perceived costs. The decision to act in a certain way can be rational even if the actions turns out to be something that the individual later regrets.
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Among the countries that use the euro, the real exchange rate ________ and the nominal exchange rate ________
A) is fixed; is fixed B) is fixed; can change C) can change; is fixed D) can change; can change
If the government created a surplus of an agricultural product due to price supports, how might they dispose of this surplus?
A) give it away to a foreign country B) purchase it and store it away C) have the farmer destroy the crop D) Any of these answers might be a successful tool in disposing of agricultural surpluses.
In order to maximize profits, a firm that can sell all it wants without affecting price should produce
a. where average variable costs are minimized. b. where marginal cost is equal to average variable costs. c. where marginal cost is equal to price. d. where marginal cost is a minimum.
______________—a term referring to the extremely elastic situation of demand or supply where quantity changes by an infinite amount in response to any change in price; it is horizontal when graphed.
a. Infinite elasticity b. Zero elasticity c. Constant unitary elasticity d. Perfect inelasticity