Because neoclassical economists assume that people are rational decision makers, they:
A. are able to make better predictions about economic behaviors and outcomes.
B. ignore the mental processes by which these decisions are made.
C. believe that people never make suboptimal decisions.
D. believe it is best to limit the number of options people have available.
Answer: B
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Economists have argued that rent control is "the best way to destroy a city, other than bombing." Why would economists say this?
a. They anticipate that low rents will cause low-income people to move into the city, reducing the quality of life for other people. b. They anticipate that rent control will benefit landlords at the expense of tenants, increasing inequality in the city. c. They anticipate that rent controls will cause a construction boom, which will make the city crowded and more polluted. d. They anticipate that rent control will eliminate the incentive to maintain buildings, leading to a deterioration of the city.
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