"I Have Been Making Furniture for 27 Years

question 398

Multiple Choice

"I have been making furniture for 27 years. I have never heard of either marginal cost or marginal revenue. Fancy economic theories mean nothing to me. I just know how to do well in business. Whenever I can sell something for more than it cost me to produce it, I make it, and whenever I can't sell it for enough to cover my cost, I don't. That's how I stay in business and earn income for my family. Common sense and watching the market are good enough for me." For producers like this, economic models

• A) accurately describe their behavior and allow predictions to be made as to how they will respond to changes in market conditions.
• B) indicate nothing about the behavior of such producers.
• C) will generally only apply if the person has a college education.
• D) do not apply because the producers do not understand the terminology.

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Definitions:

Evolutionary Theory

A scientific explanation for the diversity of life on Earth, proposing that species change over time through processes like natural selection.

Sexual Faithfulness

The practice of staying loyal to one's partner by not engaging in sexual activities outside of the relationship.

Romantic Partners

Individuals engaged in a romantic relationship with one another, characterized by emotional and often physical intimacy.

Behaviorism

A theory in psychology that focuses on observable behaviors rather than internal processes and emphasizes the role of the environment in shaping behavior.