The hypothesis that people are nearly, but not fully rational, cannot possibly fully examine every available choice, and utilize simple rules of thumb in making decisions is known as the
A. bounded rationality hypothesis.
B. ceteris paribus hypothesis.
C. individual aggregation hypothesis.
D. irrationality hypothesis.
Answer: A
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If a firm in a perfectly competitive market faces the curves in the graph shown and observes a market price of $16, the firm:
A. can make positive profits by producing less than 43 units.
B. can make positive profits by producing where MC = MR.
C. cannot make positive profits and should shut down in the short run.
D. should continue to operate in the short run, but plan to exit in the long run.
Compared with a competitive market, a monopsonist will pay a ________ wage and hire ________ workers.
A. higher; more B. lower; more C. lower; fewer D. higher; fewer
Unemployment rates differ widely among various groups in the population.
Answer the following statement true (T) or false (F)
New scientific knowledge mainly comes from university and government laboratories, not private firms, because:
A. large corporations do not have funds available to channel toward basic research. B. government pays scientists higher salaries than do private firms. C. entrepreneurs find it difficult to secure venture capital to finance innovation. D. basic scientific principles, as such, cannot be patented and do not always have commercial