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1. Economists assume that people customarily behave rationally, meaning that people: A. virtually always weigh the personal benefits and costs of every available action and choose an action on the basis of their individual wants B. act in a rational way when buying and selling products, but not in other settings C. act rationally when they buy products, but not when they sell them D. act rationally when they sell products, but not when they buy them E. are unable to act in an irrational way 2. Which of the following is a macroeconomic statement? A. The total value production was $850 billion last year. B. The price of smartphones increased by 10 percent since last year. C. Boeing's profits substantially decreased since last year. D. The productivity of Canadian steelworkers increased by 1 percent last year. E. The prices of all social media stocks rose by 25 percent last year. 3. Which of the following statements is correct? A. The value of the independent variable is determined by the value of the dependent variable. B. The value of the dependent variable is determined by the value of the independent variable. C. The dependent variable designates the "cause" and the independent variable the "effect." D. There is no cause and effect relationship between an independent and dependent variable. E. There is only a cause and effect relationship between two dependent variables. 4. If an inverse relationship exists between x and y, then a(n) : A. increase in x will not affect y B. decrease in x will cause y to decrease C. increase in y will cause x to increase D. increase in x will cause y to decrease E. an increase in y will not affect x