Loss aversion refers to the idea that:
A) people generally tend to avoid risky activities.
B) people are more prone to making losses than gains in day-to-day transactions.
C) people psychologically weight a loss more heavily than they psychologically weight a gain.
D) people are unwilling to undertake expenditures that reduce the probability of future losses.
C
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In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month. Now suppose that demand increases
The increase in demand results in the quantity supplied A) increasing. B) staying the same. C) decreasing. D) increasing, staying the same, or decreasing depending on how much demand increases.
Behavioral economists have discovered that
A) transitivity of preferences always holds, even in animals. B) the law of demand does not hold in controlled experiments. C) transitivity of preferences does not always hold, especially for young people. D) reflexivity of preferences is not true.
In the foreign exchange market, how does a change in expected future U.S. exchange rate affect the demand for dollars?
What will be an ideal response?
In the long run, changes in prices of goods and services paid by consumers have no effect on:
A. the macroeconomy. B. aggregate supply. C. aggregate demand. D. All of these are true.