A person who is, all else equal, more willing to throw away a $20 shirt than a $200 shirt, even if both are worn out, is:
A. dynamically inconsistent.
B. dynamically consistent.
C. demonstrating sunk cost fallacy.
D. demonstrating pre-commitment.
C. demonstrating sunk cost fallacy.
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Refer to Figure 4.4. The international capital market will be in equilibrium when the real interest rate in the United States is ________ and the real interest rate in the rest of the world is ________
A) 7%; 3% B) 5%; 7% C) 9%; 3% D) 5%; 5%
The age-earning cycle shows declining income as a person approaches retirement age because
A) worker productivity is increasing rapidly. B) worker and hours worked diminish. C) companies choose to promote these workers faster. D) companies add-in Social Security payments as a supplement.
The larger the multiplier, the more stable the economy
a. True b. False
At equilibrium
A. quantity supplied is equal to quantity demanded. B. quantity demanded is greater than quantity supplied. C. quantity supplied is greater than quantity demanded.