A model of choice in economics starts by assuming that:
a. people try to minimize their losses.
b. people try to maximize their consumption.
c. people try to minimize their costs.
d. people try to maximize their utility.
D
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The circular flow model shows that goods and services flow from
A) businesses to households. B) households to business. C) the factor market to businesses. D) the goods market to businesses. E) the factor markets to the goods markets.
The global financial crisis that began in 2008 was a great illustration of how interdependent national economies are
Indicate whether the statement is true or false
In the absence of externalities, what can be said about the invisible hand of the marketplace?
a) It induces people to act in a matter inconsistent with self-interest. b) It leads to a market outcome that maximizes total benefit to society. c) It increases the transaction costs of contracting between parties in an exchange. d) It is unable to resolve inherent inefficiencies in market system.
Idiosyncratic risk:
A. is unique to a particular company or asset. B. is not generally absent from index funds. C. can not be eliminated through diversification. D. All of these are true.