When economists assume that people are rational, they are assuming that people generally agree what is good for human beings.
Answer the following statement true (T) or false (F)
False
Rationale: When economists assume people are rational, they are assuming that people are goal-oriented --- that they have in mind something they are trying to achieve and then do the best they can to achieve it. This is not the same as saying that people agree what is good for human beings --- only that individuals think they know what is good for themselves and then act accordingly.
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Refer to Figure 29-3. Consider the market for U.S. dollars against the Japanese yen shown above. An event which could have caused the changes shown in the graph would be
A) an economic expansion in the United States. B) an increase in U.S. real income. C) a decrease in Japanese interest rates. D) speculators expect the dollar to depreciate in value in the near future.
If global warming began to cause random world-wide damage to crops, insurance companies
A) would insure against specific crop failures. B) would not insure against specific crop failures. C) would be indifferent between insuring or not. D) would find themselves facing prosecution for ignoring the problem for so long.
The wealth effect of a change in the price level refers to the fact that wealthier individuals tend to spend more on foreign goods
a. True b. False Indicate whether the statement is true or false
In a competitive market, the quantity of a product produced and the price of the product are determined by
a. a single buyer. b. a single seller. c. one buyer and one seller working together. d. all buyers and all sellers.