What are the three limitations on human rationality that behavioral economics emphasizes?
What will be an ideal response?
Behavioral economics studies bounded rationality (the point that people's brain-computing power is limited and this limits people's ability to make rational decisions), bounded willpower (the point that people's will power is limited so that at times they make decisions they know they will later regret), and bounded self-interest (the point that at times people make decisions that do not advance their self-interest).
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Long-run economic profits are possible in which of the following market structures?
A. Monopolistic competition B. Oligopoly and monopoly C. Perfect competition D. Only monopoly
The main problem from inflation as seen by most economists is:
A. inflation harms lenders more than it benefits borrowers. B. inflation creates risk. C. during periods of inflation some prices fall. D. inflation raises prices more than wages.
If the full-employment level of real GDP is greater than the equilibrium level of real GDP, the nation would be experiencing a(n)
A. rising prices. B. recessionary gap. C. demand-pull inflation. D. inflationary gap.
Which statement best explains why growth in China has been so rapid recently?
A. China began with very little capital, so its marginal product of capital was very low. B. China began with very high capital, so its marginal product of capital was very low. C. China began with very high capital, so its marginal product of capital was very high. D. China began with very little capital, so its marginal product of capital was very high.