People tend to wait until deadlines get close to work on projects in part because they believe that they can complete the projects in less time than it will actually take. Which findings from behavioral economics is this observation consistent with?
a. People tend to be time inconsistent and people tend to be overconfident.
b. People tend to be time inconsistent but not that people tend to be overconfident.
c. People tend to be overconfident, but not that people tend to be time inconsistent.
d. Neither that people tend to be overconfident nor that people tend to be time inconsistent.
a
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The manager of Steel Works learns of a new technological interdependency between the final stage of production and the distribution of the final product. If Steel Works currently contracts with another firm to distribute the product, which of the following is true?
A) The manager has less of an incentive to integrate forward. B) The manager has more of an incentive to integrate forward. C) The manager has more of an incentive to integrate backward. D) The manager has less of an incentive to integrate backward.
Explicit costs would include:
a. rent. b. the interest loss of the business owner on money withdrawn from his/her saving account and invested in the business. c. the loss of rent on a building the business owner owns and uses in his/her business. d. the opportunity costs of the business owner's time. e. the use of tools owned by the business owner and dedicated to the business.
A bank has $7 million in checkable deposits and $1.2 million in total reserves. If the required reserve ratio is 10 percent, then the bank has
A) required reserves of $700,000. B) excess reserves of $500,000. C) excess reserves of $1,080,000. D) required reserves of $120,000. E) a and b
Mel is thinking of going on a cruise. Mel values a cruise in nice weather at $2,000 and values a cruise in bad weather at $50. The probability of nice weather is 60 percent and the probability of bad weather is 40 percent. Trip insurance is sometimes available. If purchased, it allows travelers to delay the cruise until the weather is nice. If Mel is risk-neutral, then in the absence of trip insurance, the most she will be willing to pay for the cruise is:
A. $1,200. B. $1,000. C. $1,220. D. $1,250.