The Assumption That Individuals Act Rationally Implies That

question 107

Multiple Choice

The assumption that individuals act rationally implies that

• A)people think only of themselves and disregard the well-being of others
• B)people undertake all those activities that yield benefits to themselves
• C)people only consider the costs of an activity to decide whether it is worthwhile
• D)the greater the cost of a charitable deed to a benefactor, the more likely he or she is to perform that deed
• E)people implicitly calculate the costs and benefits of an activity to decide if it is worthwhile

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Definitions:

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing to buy at various prices.

Labor Services

The physical and mental efforts that people contribute to the production of goods and services.

Technology Changes

The process of innovation and the adoption of new or improved technologies and systems.

Demand For Labor

The total amount of hours of work that employers are willing to pay for at a given wage rate in the economy.