A key assumption of most economic analysis is that people act rationally, meaning they respond to incentives

One reason the demand for laptop computers might increase is a

A) decrease in income if laptops are a normal good. B) change in preferences as laptops have become more portable, with faster processors and larger hard drives. C) fall in the price of a laptop computers. D) poor quality performance record for laptop computers. E) fall in price of desktop computers.

Special taxes levied on earnings for Social Security and Medicare are called

A) an unfair tax on low-income families. B) an exception tax for corporations. C) a social insurance tax. D) a withholding tax on wages.