A central focus of prospect theory is:
A. how people deal with "bads," as well as how they deal with "goods."
B. optimizing precious metal discovery and extraction.
C. maximizing returns from investment portfolios.
D. how people make rational decisions despite having incomplete information.
Answer: C
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Space on a popular, public beach is ________ in consumption
A) non-excludable and non-rival B) excludable but non-rival C) excludable and rival D) non-excludable but rival
If a firm faces perfectly competitive product and factor markets and the marginal product of labor and capital are 4 and 9, respectively, while the wage rate is $2 and the rental rate on capital is $4, the firm should
A) use relatively more capital. B) use relatively less capital. C) increase all inputs proportionately. D) decrease all inputs proportionately.
____ is the subjective measure of the physical and mental satisfaction that is anticipated from consumption
a. Demand b. Supply c. Recognition d. Utility e. Cognition