Rational Choice

question 27

Multiple Choice

Rational choice

• A)is made by comparing different incentives.
• B)is always efficient.
• C)is what you must give up to get what you want.
• D)is a choice that uses the available resources to best achieve the objective of the person making the choice.
• E)provides the answer to only the 'how?' question.

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Definitions:

Price Level

The economy’s general price level across its full range of goods and services.

Short-run Equilibrium

A state in which market supply and demand balance each other, and, as a result, prices become stable temporarily.

Global Pollution

Environmental damage that crosses international borders, affecting air, water, and land on a worldwide scale.

Aggregate Supply

The total supply of goods and services that firms in an economy are willing to sell at a given overall price level and in a given time period.