Which of the following statements is false?
A. Recognizing tradeoffs is an essential part of good decision making.
B. Most government policies provide people with incentives to take certain actions and avoid others.
C. People will pursue an action as long as it has benefits associated to it.
D. Every choice involves a tradeoff.
C. People will pursue an action as long as it has benefits associated to it.
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Economic models:
A) are used to explain how people think.
B) are used to explain how people behave.
C) are essential representations of the real world.
D) are never used for making economic projections or predictions.
In the presence of asymmetric information, a fixed-fee contract
A) achieves production efficiency.
B) can lead to opportunistic behavior on the part of the agent.
C) is impossible to write.
D) will result in the principal earning all of the profit.