You decide to donate $5 to Jerry's Kids at the grocery store checkout, and get to sign your name to a shamrock and hang it in their window. This is an example of the economic concept of:

An assumption of the classical model is that

A) money illusion is widespread. B) people make decisions based on nominal prices rather than real prices. C) prices are flexible while wages are inflexible. D) people are motivated by self-interest.

If complete equality of income were legislated, which of the following would economics predict?

a. People would become richer. b. Society would gain utility from the extra goods produced. c. Individuals would willingly work longer hours and thus produce more. d. The incentive to produce and perform efficiently would be virtually eliminated.