Answer to Question #35875 in Microeconomics for Ken Carson

Question

b. One of the most basic assumptions of Economics is that individuals make decisions rationally so as to maximize their self-interest. How does this concept help understand each of the following elements of NFP’s:

i. People often work for NFP’s (particularly charities) at incomes lower than the open market.
ii. Individuals make charitable contributions to NFP’s even though they do not receive a 100% tax break for the gifts.
iii. Many people provide numerous hours of volunteer help to many NFP’s.

Answer 1

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