Which of the following is a TRUE statement about the economic assumption of rationality?
A) Individuals who are rational necessarily ignore the interests of others.
B) Individuals generally act as though they are rational.
C) Individual behavior may be irrational but group behavior is always rational.
D) People make decisions as if they are omniscient.
B
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When Congress passed a law that imposed a tax designed to fund its Social Security and Medicare programs it wanted employers and workers to share the burden of the tax equally
Most economists who have studied the incidence of the tax have concluded A) the tax rate should be greater for high-income workers than for low-income workers. B) the burden of the tax falls almost entirely on workers. C) the tax is not high enough to cover the future costs of Social Security and Medicare. D) the tax on employers is too high because it reduces the employment of low-skilled workers.
Classical theory advocates _____________ policy and Keynesian theory advocates ______________ policy
a. nonintervention; intervention b. active; nonstabilization c. stabilization; fixed wage d. fixed rule; passive