Question

In: Economics

There are multiple derivations of the Rational Rule. Define the Rational Rule broadly. Define the Rational...

  1. There are multiple derivations of the Rational Rule. Define the Rational Rule broadly.
    1. Define the Rational Rule for Buyers
    2. Define the Rational Rule for Sellers
    3. Define the Rational Rule for Workers
    4. Define the Rational Rule for Society
    5. Define the Rational Rule for Employers

Solutions

Expert Solution

1) Rational Rule for Buyers: A rational consumer is considered to be an individual that makes rational decisions on his consumption and decides for the option that maximizes the utility. A rational buyer will buy more of an item when the marginal benefit exceeds (or equal to) the price

2) Rational Rule for Sellers: According to the rational rule the seller will be selling more of a good when the marginal cost has not risen to exceed (or equal to) the marginal benefit. Thus will keep selling until marginal revenue equal to marginal cost

3) Rational Rule for Workers: A rational consumer will decide to work additional hours as long as the wage would be at least as large as the marginal benefit of another hour of leisure

4) Rational Rule for Society: The theory states that social efficiency will be achieved when the marginal social benefits to society (MSB) will be equal to the marginal cost/opportunity to society (MSC)

5) Rational Rule for Employers: The employee will be hired up to the point when the marginal revenue product exceeds or equal to the wage rate. The employer will hire more workers if the MRP exceeds than or equal to the price.


Related Solutions

Define a class called Rational for rational numbers. Arational number is a number that can...
Define a class called Rational for rational numbers. A rational number is a number that can be represented as the quotient of two integers. For example, /2, 3/4, 64/2, and so forth are all rational numbers.Represent rational numbers as two private values of type int, numfor the numerator and den for the denominator. The class has a default constructor with default values (num = 0,den = 1), a copy constructor, an assignment operator and three friend functions for operator overloading...
Define what is normally referred to as the "national standards rule" and "the locality rule" in...
Define what is normally referred to as the "national standards rule" and "the locality rule" in describing the norms and expectations of appropriate medical care in the United States. In what instances, if any, should the locality rule prevail over the national standards rule? Further, is it practicable to have a national standards rule over the locality rule in the real world where the amount and kind of real resources does vary from one locale to another? Should these rules...
For each of the following concepts: define it and give an example. a. rule b. rule...
For each of the following concepts: define it and give an example. a. rule b. rule control c. rule-governed behavior d. contingency control e. contingency-governed behavior (contingency-shaped behavior).
13. the assumption of rational self interest does not rule out the possibility of concern for...
13. the assumption of rational self interest does not rule out the possibility of concern for other individuals. 14. In the short run all costs are fixed. 15. If a perfectly competitive firm is producing at a quantity at which MC< AVC, it cannot be maximizing profit in the short run. 17. A firm's supply curve is that portion of its average cost curve that lies above their marginal cost curve. 18. In the long run in perfect competition, no...
a)Define economic theory and give an example of a ceteris paribus problem b)Discuss broadly into details...
a)Define economic theory and give an example of a ceteris paribus problem b)Discuss broadly into details why the balance of payments report is useful to the Ministry of Finance. c)Differentiate between: i)normative economics and positive economics ii)price elasticity of demand and income elasticity of demand Already rated 100%. Best chegg expert
Define Bergmann's rule and Allen's rule in relation to climate adaptation. What is one example of...
Define Bergmann's rule and Allen's rule in relation to climate adaptation. What is one example of an environmental factor that can lead to development of body-shape characteristics that deviate from those predicted by these two rules?
The musician was known for multiple encore performances, but had limited stamina and a rational mind....
The musician was known for multiple encore performances, but had limited stamina and a rational mind. Even she would eventually call it a night when, by her judgement
Find all zeros of the polynomial function. Use the Rational Zero​ Theorem, Descartes's Rule of​ Signs,...
Find all zeros of the polynomial function. Use the Rational Zero​ Theorem, Descartes's Rule of​ Signs, and possibly the graph of the polynomial function shown by a graphing utility as an aid in obtaining the first zero or the first root. f(x)=2x4-17x3+13x2+53x+21 The zeros of the function are?
Explain the following: Policy Rule Discretionary Policy Time Inconsistency Rational Expectations Policy Credibility
Explain the following: Policy Rule Discretionary Policy Time Inconsistency Rational Expectations Policy Credibility
define and describe multiple accounting systems.
define and describe multiple accounting systems.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT