Which of the following is true?
i. A rational choice is always made in the pursuit of social interest.
ii. Economics is a social science.
iii. Economists try to understand how the economic world works by testing positive statements.
A) only i B) ii and iii C) only ii D) i and ii E) only iii
B
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Because leisure is a normal good, an increase in income
a. decreases the demand for leisure time and reduces the amount of time allocated to market work b. decreases the demand for leisure time and increases the amount of time allocated to market work and/or nonmarket work c. increases the demand for leisure time and reduces the amount of time allocated to market work and nonmarket work d. increases the demand for leisure time and increases the amount of time allocated to market work and nonmarket work e. has no impact on the demand for leisure time
Economic models typically assume that decision makers face constraints because of scarce resources
a. True b. False
When a firm's demand curve is downward-sloping, its marginal revenue at any positive sales quantity is ______ its price.
A. greater than B. less than C. equal to D. less than or equal to
Even though households do not actually purchase certain items, the government estimates and adds to the consumption component what the household would pay for these items in the marketplace. An example of this type of item is
a. a car that an individual builds from parts of old cars b. food that a farm family grows for themselves c. a pond that a household member digs by hand d. police and fire protection e. a barn that a household builds on their own property