Economic theory assumes people
A) rarely act generously.
B) consistently act selfishly.
C) make choices based on a comparison of cost and benefits.
D) are fundamentally complex. Therefore, no general theory can be deduced to make sense out of the decisions and choices people make.
C
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The marginal cost incurred by the entire society to produce a good or service is the
A) marginal external cost. B) marginal private cost. C) marginal social cost. D) marginal social benefit. E) marginal private benefit.
All else the same, when the Fed calls in a $100 discount loan previously extended to the First National Bank, reserves in the banking system
A) increase by $100. B) increase by more than $100. C) decrease by $100. D) decrease by more than $100.
Suppose there are 100 identical firms in the rag industry, and each firm is willing to supply 10 rags at any price. The market supply curve will be a
A) vertical line where Q = 10. B) vertical line where Q = 100. C) vertical line where Q = 1000. D) horizontal line where Q = 1000.
"Rolling over" the debt means
a. to repay old bonds that come due for payment by issuing new bonds. b. to repay old bonds that come due by printing money. c. dividing the tax burden of the debt across the fifty states based on their share of the population. d. dividing the tax burden of the debt across the fifty states based on their share of economic activity. e. to repay old bonds that come due by giving gold to the bondholders from the national gold depository in Fort Knox..