What two assumptions are traditional economists more likely to make compared to behavioral economists?
A. Rationality and self-interest.
B. Not all information is available, and the invisible hand is efficient.
C. Incentives are important, and people base decisions on the economic decision rule.
D. Purposeful behavior and predictable irrationality.
Answer: A
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A change in the output gap is likely to lead to ________
A) a change in inflation B) a change in expected inflation C) a shift of the short-run aggregate supply curve D) all of the above E) none of the above
In economics, money is an example of capital
a. True b. False
If a firm is a price taker, then its marginal revenue will always equal
A) price. B) total cost. C) zero. D) one.
Governments,
A) like individuals, face opportunity costs. B) unlike individuals, do not face opportunity costs. C) only if they are relatively poor, face opportunity costs. D) only if they are running budget deficits, face opportunity costs.