When an individual weighs her options and makes a choice that maximizes her benefit at the minimum cost, economists refer to this as a process of
a. rational decision making.
b. objective decision making because the value of goods is determined objectively.
c. marginal management analysis.
d. random decision making.
A
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Which of the following statements most accurately describes the role of banks in the United States between the Civil War and WWI?
a. The U.S., which had the largest economy in the world, also had the largest banks in the world. b. Banking reforms increased the ability of state banks to issue their own notes. c. Compared to state banks, national banks generally had higher reserve requirements and more restrictions on how they could handle their assets. d. Those who borrowed money at fixed interest rates gain significantly during deflationary periods.
A production possibilities curve graphically represents the maximum quantities of two products produced when all resources in the economy are being used efficiently. If an economy operates at a point inside its production possibilities curve,
a. it lacks the resources necessary to produce at full employment. b. it is utilizing some resources inefficiently. c. it does not confront the problem of scarce goods relative to unlimited wants. d. it does not exist in the real world since it is impossible for an economy to operate inside its production possibilities curve.