Rick finds a great Internet deal on an all-inclusive vacation rental in the Tropics for $1200, and immediately places a $1000 nonrefundable deposit on it. He later learns that the dates he planned to go are right in the middle of hurricane season, and it is likely to be miserable and potentially dangerous weather the entire time. Rick decides he cannot waste the $1000 and takes the trip anyway. While sitting in the rain, miserable, Rick realizes:
A. he fell victim to the sunk-cost fallacy and should have ignored the fact that the $1000 was gone.
B. he fell victim to the implicit-cost fallacy and should have ignored the fact that the $1000 was gone.
C. he fell victim to the fungibility-fallacy and should not have gone on the trip.
D. going on the trip was a utility-minimizing experience.
A. he fell victim to the sunk-cost fallacy and should have ignored the fact that the $1000 was gone.
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If the quantity demanded of hamburgers increases by 20 percent when the price decreases by 5 percent, then the price elasticity of demand is
A) 0.25. B) 4.0. C) 20.0. D) 5.0.
The data in the above table show that when the price level is 120
A) the unemployment rate is below its natural rate. B) the unemployment rate is above its natural rate. C) money wages rates will rise in the future. D) the long-run aggregate supply curve will shift leftward in the future.
When costs that vary with the level of output are divided by the output, you have calculated:
a. total changing cost. b. total fixed cost. c. average fixed cost. d. average variable cost.
Which of the following is characteristic of an oligopolistic industry?
a. few firms b. interdependence c. large barriers to entry d. All of the above