In an Economic Model of Consumer Behavior, Rational Self-Interest Would

question 2

Multiple Choice

In an economic model of consumer behavior, rational self-interest would likely be

• A)a key variable
• B)the hypothesis of the model
• C)a behavioral assumption
• D)a prediction of the model
• E)a method of testing the model

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Definitions:

Technology

The application of scientific knowledge for practical purposes, especially in industry.

Positive Profits

The financial gain that occurs when total revenue exceeds total costs.

Long Run

A period in which all factors of production and costs are variable, allowing full adjustment to any change in market conditions.

Economic Profit

The difference between total revenues earned from production and the total opportunity costs of all inputs used in production.