According to economic theory, how do people make decisions?
A) They make decisions in the same manner as their parents did.
B) They make decisions by looking at what others have done in the same situation and then doing the opposite.
C) They make decisions by looking at what others have done in the same situation and then doing the same.
D) They make decisions based on their own self-interest.
Answer: D
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_____ is a good measure of economic well being if policy makers want to satisfy the preferences of buyers
Fill in the blank(s) with the appropriate word(s).
Which of the following correctly defines the average propensity to consume (APC)?
A) change in planned consumption divided by change in real disposable income B) planned consumption divided by real disposable income C) real disposable income divided by planned consumption D) change in real disposable income divided by change in planned consumption