When economists assume that people act rationally, it means they:
a. make decisions based on complete and accurate information
b. make decisions that will not be regretted later on.
c. make decisions based on what they believe is best for themselves using available information.
d. make decisions based solely on what is best for society.
c
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Price elasticity of demand measures the:
A. slope of the demand curve. B. sensitivity of quantity demanded to changes in the price of substitute goods. C. sensitivity of price to changes in the quantity demanded of substitute goods. D. sensitivity of quantity demanded to changes in price.
Legal reserve requirements on banks in the United States today are primarily
A) a limitation on banks' ability to make loans. B) a protection for bank depositors against runs. C) a protection for bank shareholders against capital loss. D) an attempt to restrain the market power of banks. E) designed to control competition among banks.