Question

6-8

QUESTION 6 Which of the following describes that people cannot examine every possible choice available to them but instead use simple rules of thumb to sort among the alternatives that happen to occur to them? self-interest normative economics ceteris paribus bounded rationality QUESTION 7 An economic system is the universe of all resources. an organization that generates profits. O a mechanism to allocate scarce resources. a way to create new resources. QUESTION 8 To be useful, a model must predict the behavior of every individual. predict more accurately than other models that have been developed. have assumptions that have been verified by empirical testing, predict accurately all of the time

Answer 1

6) :-d is right answer bounded Rationality.

The bounded rationality hypothesis assumes people are not fully rational and therefore use simple rules of thumb to sort among the alternatives that happen to occur to them.

7) :-c is right option ,a mechanism to allocate scarce resources

• allocation of scare resources to the production of those good whose market price yield more profit

8) :- b is right option, predict more accurately than other models that have been developed.