The most fundamental concept in economics is that
a. changes in incentives influence behavior in a predictable way--people will be less likely to choose an option as it becomes more expensive.
b. changes in incentives generally do not influence human behavior.
c. goods that are provided by government are free for society.
d. individuals generally do not consider other alternatives when making a choice.
A
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The GDP price index is different from other price indexes because ________.
A. it includes transactions from both the formal economy and the underground economy B. it is based on a fixed market basket of goods C. it is the broadest measure of prices in the economy D. it includes both foreign produced goods and domestically produced goods
When economists say an individual has made a rational choice, they mean the individual has
a. made the choice by weighing their own subjective costs and benefits. b. made a "good" decision, one that reasonable outside observers would have also made. c. neglected to consider the unintended consequences arising from their decision. d. ignored their own personal interests and made the choice that is best for society.
Which of the following would cause price to decrease?
a. a decrease in supply b. an increase in demand c. a surplus of the good d. a shortage of the good
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.