Economics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 28

Each statement below is part of an economic model. Indicate whether the statement is a prediction of cause and effect or an assumption. a. People behave rationally.
B) If the price of a good falls, people will consume more of that good.
C) Mass starvation will occur as population outgrows the food supply.
D) Firms want to maximize profits.