Exemptions are better off for the taxpayer than deductions _____

When economists assume that people are rational and respond to incentives, they mean

A) people act with kindness. B) people act in their own self-interest. C) people are altruistic. D) people are selfish.

If production is subject to economies of scale,

a. countries can gain from trade if each nation specializes b. one country will develop an absolute advantage in the production of all goods c. higher output levels result in higher average production costs d. one country will develop a comparative advantage in the production of all goods e. countries cannot gain from trade