The assumption underlying economic theory is that
A) people respond only to negative incentives, not to positive ones.
B) choices are affected by incentives.
C) value judgments do not play a role in the economic decisions people make.
D) money is the only incentive that matters.
Answer: B
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___________ are repetitive, often unconscious, patterns of behavior
a. Goals b. Values c. Habits d. Attitudes
A one percentage point in the growth rate
A) does not make much difference in the long run per capita real GDP. B) will not influence the real standard of living in a country. C) can make a big difference in the per capita real GDP because of urban congestion. D) can make a big difference in the per capita real GDP because of compounding.
The lower portion of the circular flow model contains factor markets in which households provide:
a. output of all final goods and services produced. b. savings, spending, and investment. c. labor, money, and machines. d. none of these.
For this question, assume that expectations of productivity are slow to adjust. Further assume that A had been increasing by 6% a year. Now suppose that A only increases by 2% in period t. This slowdown in productivity growth will cause
A) the PS relation to shift up more than the WS relation. B) the WS relation to shift up more than the PS relation. C) the natural rate of unemployment to fall. D) the real wage to fall.