Economic analysis assumes that
a. people act only out of selfish motives.
b. people are motivated by a variety of forces; however, changes in personal benefits and costs affect behavior only when individuals are motivated by selfishness.
c. people are basically unselfish, and their actions are, therefore, difficult to predict.
d. changes in the personal benefits and costs associated with an activity will exert a predictable influence on the behavior of both those who are selfish and those who are unselfish.
D
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A firm's demand for labor depends on the
A) nominal wage rate because it pays workers in dollars. B) real wage rate, which equals the nominal wage divided by the price level. C) real wage rate, which equals the nominal wage divided by the hours worked. D) nominal wage rate, which equals the real wage divided by the price level. E) supply of labor.
Seth is a competitive body builder. He says he has to have his 12-oz package of protein powder to "feed his muscles" every day. On the basis of this information, what can you conclude about his price elasticity of demand for protein powder?
A) It is perfectly inelastic. B) The price elasticity coefficient is 1. C) It is elastic. D) It is perfectly elastic.
The return on a 5 percent coupon bond that initially sells for $1,000 and sells for $950 next year is
A) -10 percent. B) -5 percent. C) 0 percent. D) 5 percent.
Unemployment that results from a mismatch of workers' abilities and skills with current requirements of employers is
A) frictional unemployment. B) structural unemployment. C) cyclical unemployment. D) seasonal unemployment.