When attempting to explain why a consumer purchases a Ford automobile instead of a Honda automobile, or a Compaq computer instead of an IBM computer, an economist would assert:
a. that the consumer is making a decision based on what gives him maximum utility.
b. that everyone knows Hondas are superior to Fords; the consumer cannot possibly be maximizing his utility.
c. that everyone knows IBM computers are superior to Compaq computers; the consumer may be maximizing his utility at the margin, but is not maximizing total utility.
d. that there is no standard explanation for consumer choices because consumers have varied tastes and preferences.
e. that since rationality is bounded by lack of information, a consumer purchases goods based on convenience rather than on utility maximization.
a
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? Assume that Figure 4-4 shows demand for orange juice. A decrease in the price of apple juice will change demand from
A. D1to D2. B. D2to D1. C. D2to D3. D. D1to D3.
Persistent current account deficits in the United States
A) cause persistent declines in investment in the United States. B) will eventually cause the value of the dollar to rise. C) can be seen as a vote of confidence in the strength of the U.S. economy. D) cause U.S. investors to accumulate more foreign assets than foreign investors accumulate U.S. assets.
Wage discrimination means minority workers are paid unequal wages
a. True b. False Indicate whether the statement is true or false
Inflation caused by continually decreasing short-run aggregate supply is
A. cost-push inflation. B. demand-pull inflation. C. demand-push inflation. D. cost-pull inflation.