"Rational, self-interested people would never end up worse off by any decision they make. Obviously, people often make mistakes or have regrets. Therefore, people do not act rationally or out of self-interest." Do you agree with these statements? Why or
why not?
What will be an ideal response?
No. People may make mistakes because they often do not have enough information to make the best decision or because they are wrong about the effect of their actions. When they make a decision, given their circumstances and the information they have, they make the best choice for themselves.
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In an economy with lump-sum taxes and no international trade, if the marginal propensity to consume is 0.8, which of the following is true?
a) when consumption increases by $5, investment increases by a maximum of $1 b) when consumption increases by $5, savings increase by a maximum of $1 c) when investment increases by $1, income increases by a maximum of $5 d) when investment increases by $1, consumption increases by a maximum of $5 e )when income increases by $1, investment increases by a maximum of $5
Which of the following statistics confirm the rise in de-integration in the U.S. post 1970s?
a. The average number of industrial sectors a firm operated in increased substantially in 1997. b. Employment in the business services industry that supplied contract employees grew by almost five times as much as non-farm employment. c. Between 1977 and 1999, imports of the U.S. firms from foreign affiliates as a percentage of total imports increased substantially. d. Between 1977 and 1999, imports of the U.S. firms from unrelated suppliers as a percentage of total imports declined.