According to behavioral economists, the human brain frequently employs heuristics because:
A. people have consciously trained their brains to do so.
B. these shortcuts minimize errors in decision making.
C. they produce more optimal outcomes than do rational calculations of benefits and costs.
D. they save energy and time in decision making.
Answer: D
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If Matt's disposable income increases from $4,000 to $4,500 and his level of saving increases from $200 to $325, it may be concluded that his marginal propensity to:
A. save is 0.30. B. consume is 0.80. C. consume is 0.75. D. save is 0.60.
Which characteristic is associated with monopolistic competition?
A) collusion B) product differentiation C) small number of firms D) awareness of rival firms in the market
Suppose the market price of zinc doubles. Which of the following scenarios is most likely?
A) The demand for zinc miners will increase, raising the market wage rate. B) The demand for zinc miners will decrease, reducing the market wage rate. C) The demand for zinc will increase, raising the market price further. D) The demand for zinc miners will decrease, reducing the market price back to its original price.
When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,
a. consumer surplus increases and total surplus increases in the market for that good. b. consumer surplus increases and total surplus decreases in the market for that good. c. consumer surplus decreases and total surplus increases in the market for that good. d. consumer surplus decreases and total surplus decreases in the market for that good.