When economists assume that people are rational and respond to incentives, they mean
A) people act with kindness. B) people act in their own self-interest.
C) people are altruistic. D) people are selfish.
Question 2
Consider two economies: A and B. In economy A, the work culture is such that people do not mind working for 12 hours a day. On the contrary, in economy B, people work for a maximum of 6 hours in a day. If the culture hypothesis holds, then:
A) the growth rate in both economies are likely to fluctuate randomly.
B) economy A is likely to grow faster than economy B.
C) economy B is likely to grow faster than economy A.
D) both economies are likely to grow at the same rate.
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