The status quo bias implies that:
A. people are restricted in their choices.
B. people are biased toward making a mistake.
C. people do not like making changes.
D. people's actions often are influenced by what they perceive as the default choice.
Answer: D
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One of the differences between microeconomics and macroeconomics is the use of fiscal policy. Fiscal policy is conducted by:
a. local banks. b. a nation’s central bank. c. a nation’s legislative body. d. a state’s legislative body.
Which of the following best illustrates the concept of "derived demand"?
a. A decrease in the price of glass causes the demand for plastic to decrease. b. An increase in the demand for bread leads to an increase in the demand for flour. c. A decrease in the price of air travel leads to an increase in the quantity demanded of air travel. d. An increase in the demand for peanut butter leads to an increase in the demand for jelly.
When the price level rises in the United States, there is increased demand for loanable funds, ceteris paribus. Which concept is exemplified?
a. foreign trade effect b. transfer payment effect c. wealth effect d. interest rate effect
According to the Hotelling Rule, the price of an exhaustible natural resource will
a) be very volatile b) rise at the rate of interest c) be too low and result in to being exploited too quickly d) rise to ensure that the resource never runs out. e) Always be at the backstop price where rival sources are economic