O A. Economists assume that people make decisions based on total, rather than marginal, variablesO B. Economists assume that people do not respond to economic incentives.O C. Economists assume that people generally make the correct choices.O D. Economists assume that people use all available information as they take actions intended to achieve their goals.When economists state that people respond to economic incentives, who are the people that respond to incentives?Ocustomers onlyOfirms onlyOcustomers and firmsOneither customers nor firmsWhat does it mean to say that optimal decisions are made at the margin?

Discuss each of the following economic ideas: People are rational, people respond to incentives, and optimal decisions are made at the margin In what way do economists assume that people are rational? A. Economists assume that people make decisions based on total, rather than marginal, variables. O B. Economists assume that people do not respond to economic incentives. O C. Economists assume that people generally make the correct choices O D. Economists assume that people use all available information as they take actions intended to achieve their goals When economists state that people respond to economic incentives, who are the people that respond to incentives? O customers only O firms only O customers and firms O neither customers nor firms What does it mean to say that optimal decisions are made at the margin? O A. The optimal decision is to continue any activity to the end, even if the marginal benefit is less than the marginal cost. O B. Most decisions are "all or nothing" and require full commitment to one activity before moving to the next. O C. The optimal decision is to continue any activity up to the point where the marginal benefit equals the marginal cost. O D. Most decisions are made considering the marginal benefit without considering the marginal cost