The field of economics that draws on insights from psychology to expand models of individual decision making is called:
A. psychological economics.
B. emotional economics.
C. decision optimization economics.
D. behavioral economics.
Answer: D
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Bill Gates is a founder of Microsoft and the world's richest individual. Suppose Microsoft sells more software and Mr. Gates acquires another billion dollars in wealth
Simultaneously, suppose a burglar whose income is well below average broke into Bill Gates' house and stole a million dollars' worth of antiques. Using the "it's not fair if the rules aren't fair" approach to fairness, is Mr. Gates' acquisition of additional wealth fair? Is the (poor) thief's acquisition fair?
Which statement is true?
A. Both unemployment compensation and personal savings are automatic stabilizers. B. Neither unemployment compensation nor personal savings are automatic stabilizers. C. Only unemployment compensation is an automatic stabilizer. D. Only personal savings is an automatic stabilizer.
Refer to the graph below. If the output level is Q2, then there will be:
A. Allocative efficiency
B. Maximum deadweight losses
C. Maximum consumer surplus
D. Greater marginal benefits than marginal costs of the product
For an investor who starts with dollars and wants to end up with dollars in the future, which of the following choices is an example that includes hedging?
A. Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and then, buy dollars at the future spot rate B. Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and sign a forward exchange contract to buy the foreign currency C. Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and sign a forward exchange contract to buy dollars D. Buy a dollar-denominated financial asset