Economic analysis assumes "purposeful behavior", which means that people will pursue decisions or actions:
A. That will increase their well-being
B. Always based on full or complete information
C. With minimal consideration for their emotions
D. Without any logical faults
Answer: A
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Large economies, such as the U.S. economy, should ________ adopt a flexible exchange rate, because giving up the power to stabilize the domestic economy via monetary policy ________.
A. almost never; is of little consequence B. nearly always; is of little consequence C. nearly always; comes with a high cost D. almost never; comes with a high cost
In the figure above, the equilibrium market price is $20. $20 is the
A) marginal cost of the 150th unit. B) willingness to pay for the 1st unit. C) producer surplus. D) consumer surplus. E) deadweight loss.
Because firms selling a homogeneous product set price in response to the (perceived) pricing decision of other firms in the Bertrand Model of oligopoly in equilibrium price exceeds marginal cost
Indicate whether the statement is true or false
Which of the following is not an argument usually presented in favor of trade restrictions?
a. national security b. infant industry c. cheap foreign labor d. diversity of industry e. increased efficiency