If Economists Are Making the Assumption That Business People Try

question 214

Multiple Choice

If economists are making the assumption that business people try to maximize profits, the best way to determine whether this assumption is useful or not is to

• A) see whether it generates accurate predictions about the choices of business people.
• B) ask business people whether it is true or not.
• C) find out whether U.S. businesses are more profitable than European businesses.
• D) take a survey of people and see if they agree with this assumption.

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Definitions:

Wheat

Wheat is a cereal grain, originally from the Levant region of the Near East but now cultivated worldwide, a staple food used to make flour for breads, pasta, and other foods.

Opportunity Cost

The cost of a missed opportunity; the value of the best alternative that one gives up when making a decision.

Frozen Foods

Food products that have been preserved through freezing to extend shelf life and retain nutritional value.

Labor Force

The aggregate sum of individuals working or actively looking for work in an economic system.