Which of the following is always TRUE of rational behavior?
A) It always entails pursuing one's own best interest.
B) It always yields the best possible outcome for all individuals.
C) It never involves the pursuit of greedy self-interest.
D) It never involves taking into account the interests of others.
A
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Refer to Figure 16-1. With perfect price discrimination, the firm will produce and sell
A) Q1 units. B) Q2 units. C) Q3 units. D) Q4 units.
Recently, there has been talk about reforming the tax system. Some advocate replacing the current income tax with a consumption tax. The income tax taxes interest earned on savings directly, while a consumption tax doesn't. The most likely effect on savings, if there is a shift to the consumption tax, would be to
a. raise interest rates b. shift the supply curve of loanable funds to the left c. encourage higher consumption d. shift the supply curve of loanable funds to the right e. discourage savings