The assumption that individuals will not intentionally make decisions that will leave them worse off is known as
A) microeconomic analysis.
B) macroeconomic analysis.
C) a model or theory.
D) the rationality assumption.
Question 2
Mr. Smith earns 100,000 per year. Each year he spends 50,000 and saves 50,000. He pays a 5 percent sales tax on all of his spending. Assuming the sales tax is the only tax he pays, his average tax rate out of his income is
A) 0 percent.
B) 2.5 percent.
C) 3.5 percent.
D) 5.0 percent.
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