When studying human behavior, economists assume rational self-interest. This means that:
A. People make decisions based on some desired outcome
B. People are quite selfish, and are not concerned about others
C. People always make the right decisions
D. People have all the information they need to make a decision
Answer: A
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What is the marginal cost of producing the third unit?
a. 60 b. 70 c. 90 d. 110
Since 2002, the Fed has shifted to expansionary monetary policy, then to restrictive policy, and then back to expansionary monetary policy. Policy shifts of this type are most likely to
a. promote economic stability and stimulate employment. b. keep the general level of prices relatively stable because the periods of restrictive policy will just offset the periods of expansion. c. help promote economic stability because changes in monetary policy can be counted on to exert a predictable impact on the economy quickly. d. promote instability because the time lags of monetary policy are long and variable.
Price ceilings are never binding when set above the equilibrium price
a. True b. False Indicate whether the statement is true or false
If an economy can increase its steady annual growth rate from 2 percent to 3 percent, this reduces the time it takes for the economy to double in size by __________ years
A) 5 B) 8 C) 12 D) 17 E) 20