Suppose in a democratic society, all voters prefer choice G over choice B; however, when the two choices are presented along with a third choice, R, B wins the election. This violates the assumption of
A) transitivity.
B) non-dictatorship.
C) independence of irrelevant alternatives.
D) completeness.
C
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Which of the following characteristics is a precondition for economic growth? i. economic freedom ii. free markets iii. active government policy to discourage saving
A) i only B) ii only C) iii only D) Both i and ii E) Both ii and iii
In the figure above, the shift in the supply curve for U.S. dollars from S0 to S2 could occur when
A) the U.S. interest rate falls. B) the expected future exchange rate rises. C) the U.S. interest rate differential increases. D) the current exchange rate falls.
If stock prices follow a random walk,
A. speculation in the stock market destabilizes prices. B. a stock’s past performance is not a good indicator of its future performance. C. rumors, news, and other “signals” have no effect on stock prices. D. the stock market does not participate in channeling resources toward firms with high stock prices.
"Prices rise when the quantity of money rises rapidly" is an example of a
a. negative economic statement. b. positive economic statement. c. normative economic statement. d. statement that contradicts one of the basic principles of economics.