An estimation technique that begins with an initial approximation, which is then modified in accordance with additional information, is known as:
A. the representative heuristic.
B. status quo bias.
C. regression to the mean.
D. anchoring and adjustment.
Answer: D
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Suppose that elimination of tariffs on agricultural products means that 1,000 farm workers lose jobs that pay an average of $20,000 per year
At the same time, because of the importation of relatively cheaper foreign vegetables, 150 million consumers save $2 per year on their grocery bills. a. What is the total income lost by farm workers because of the free trade? b. What is the total dollar amount saved by all consumers combined? c. Which is greater, the lost income or the consumer savings? Do the benefits of free trade outweigh the costs in this simple example? d. Which group is most likely to become politically involved over the issue of removing the tariffs, the farm workers or the consumers? Why?
A defined benefit pension plan is designed to retain a worker at the same firm for his or her career
Indicate whether the statement is true or false
Suppose you want to buy a boat, but you know that interest paid on a boat loan is not tax deductible. Therefore, you take out a home equity loan, the interest on which is still tax deductible. This procedure is an example of
a. illegal tax avoidance b. illegal tax evasion c. legal tax avoidance d. legal tax evasion e. the answer cannot be determined from the information given
Fixed costs
A) do not vary with output B) vary with output C) do not vary with price D) vary with price