Suppose the U.S. government encouraged new medical school graduates to take over existing practices from doctors wishing to retire by paying both the new and retiring doctors $100,000. These doctors would be exemplifying the economic idea that
A) people are rational. B) people respond to economic incentives.
C) optimal decisions are made at the margin. D) equity is more important than efficiency.
B
You might also like to view...
Which is greater, gross domestic product or national income? By how much?
a. Gross domestic product < National income; indirect business taxes, depreciation, and income earned by foreigners in the United States b. Gross domestic product < National income; net exports and indirect business taxes c. Gross domestic product > National income; net exports and indirect business taxes d. Gross domestic product > National income; indirect business taxes, depreciation, and income earned by foreigners in the United States
If the value of the domestic currency depreciates:
a. Aggregate demand and aggregate supply rise. b. Aggregate demand rises and aggregate supply falls. c. Aggregate demand and aggregate supply fall. d. Neither aggregate demand nor aggregate supply change. e. None of the above.
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Refer to the information provided in Figure 6.7 below to answer the question(s) that follow.
Figure 6.7Refer to Figure 6.7. Along budget constraint AB, the price of good X is $10 and the price of good Y is $12. If the price of X increases to $15, the budget constraint will
A. shift in parallel to AB. B. pivot in at point B. C. pivot in at point A. D. pivot out at point A.