Economists usually assume that people act in a rational, self-interested way. In explaining how consumers make choices this means that economists believe
A) consumers will always buy goods and services at the lowest possible prices.
B) consumers spend their incomes to order to accumulate the most goods and services.
C) consumers make choices that will leave them as satisfied as possible given their incomes, tastes, and the prices of goods and services available to them.
D) consumers will spend their incomes and time on activities that benefit themselves as much as possible, without regard to the welfare of others.
Answer: C
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Most people buy salt infrequently and in small quantities. Even a doubling of the price of salt is likely to result in a small decline in the quantity of salt demanded. Therefore
A) the price elasticity of demand for salt is greater than 1 (in absolute value). B) the demand for salt will be perfectly inelastic. C) salt is a normal good. D) the demand for salt is relatively inelastic.
When governments subsidize retraining programs for unemployed workers to learn new skills, they are trying to minimize the effects of which kind of unemployment?
A. Seasonal B. Structural C. Frictional D. Real-wage
Compared to Italy and Japan, the debt as a percentage of GDP in the US is
A. roughly equal. B. substantially greater. C. substantially smaller. D. slightly smaller.
In which of the following ways can a corporation raise new funds for investment?I.Issuing new shares of stockII.Having existing stock resold between two owners
A. I only B. II only C. Both I and II D. Neither I nor II