The rationality assumption states that
A) all actions taken by consumers are based on what is good for society.
B) people make decisions regardless of how the outcome will affect them.
C) people make decisions to buy only those goods that they need rather than goods that they want.
D) people do not intentionally make decisions that would leave them worse off.
Answer: D
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A green pasture has turned barren due to overgrazing. This happened because the pasture was ________
A) excludable and rival B) non-excludable and non-rival C) excludable but non-rival D) non-excludable but rival
If marginal utility is positive but diminishing, as more units of a good are consumed, then the total utility from the good must be
A) falling. B) positive and rising at an increasing rate. C) positive and rising at a decreasing rate. D) positive and rising at any rate.
Under monopolistic competition, firms produce ________ products and have long-run profits that are ________ (net of fixed costs).
A. differentiated; positive B. differentiated; close to zero C. homogenous; positive D. homogenous; close to zero
Normative economics deals with ____ and positive economics deals with ____
a. what should be; what is b. fiction; fact c. microeconomics; macroeconomics d. negative aspects; positive aspects e. changing circumstances; same circumstances