When psychologists refer to the "Paradox of Choice", what do they mean?
a. More choices may lead people to avoid the decision all together.
b. More choices always make people at least as well off (related to the option value principle).
c. Risk-averse people sometimes prefer risk because of the thrill it provides.
d. If two people with free will make simultaneous decisions, these may sometimes conflict.
a
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A homeowner, frustrated with his next-door-neighbor's refusal to mow his lawn, decides he wants to purchase the house from his neighbor and rent it to a more conscientious person, but his neighbor refuses to sell. In this case,
A) eminent domain would likely be used to reduce transactions costs. B) eminent domain would likely be used to reduce the holdout problem. C) eminent domain would not likely be used. D) eminent domain would likely be used because this transaction would increase cooperative surplus.
The presence of adverse selection in a market causes:
A. some transactions to fail to take place. B. a deadweight loss. C. market failure. D. All of these statements are true.
Refer to the information provided in Figure 3.1 below to answer the question(s) that follow.
Figure 3.1Refer to Figure 3.1. Which of the following would be most likely to cause the demand for Dr. Pepper to shift from D0 to D1?
A. an increase in the price of Dr. Pepper B. an increase in the price of sugar used to make Dr. Pepper C. a decrease in the price of 7-UP, assuming 7-UP is a substitute for Dr. Pepper D. an increase in income, assuming that Dr. Pepper is a normal good
An economic variable that moves in the opposite direction as aggregate economic activity (down in expansions, up in contractions) is called
A. procyclical. B. countercyclical. C. acyclical. D. a leading variable.