The theory of rational behavior
A. assumes that people will behave in the best interest of society as a whole.
B. implies that people will always take the time to make perfectly informed decisions.
C. is an assumption that economists make to have a useful model for how decisions are made.
Ans: C. is an assumption that economists make to have a useful model for how decisions are made.
Explanation: Economists while building a model of decision making relies on rational behavior of the consumers. It says that consumers are rational in the sense that they try to maximize the benefit or utility and minimize the cost, without coming under the influence of sentiments.
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What will be an ideal response?
Refer to the above figure. If the government set a price floor of $3.50 per gallon, there would be
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B) an excess quantity supplied equal to the distance BD.
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D) an excess quantity supplied equal to 100,000 gallons.
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