Jan is a hyperbolic discounter. She puts weight 1 on utility earned in the current period but only weight .5 on utility earned in future periods. In period 1 she comes up with a plan, which involves taking some action that leads to a loss of C utils in period 2 but provides a benefit of B utils in period 3 . What values of B and C will lead her to behave inconsistently and not follow through on
her plans?
a. C < B < 2C.
b. B < C.
c. B > 2C.
d. B < C < 2B.
a
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A) microeconomics. B) positive economics. C) macroeconomics. D) normative economics.
During recessions, government expenditure automatically
A) rises because of programs such as unemployment insurance and Medicaid. B) falls because of programs such as unemployment insurance and Medicaid. C) falls because of the progressive income tax system. D) rises because of the progressive income tax system.
When a profit-maximizing firm is earning profits, those profits can be identified by
a. P × Q. b. (MC - AVC) × Q. c. (P - ATC) × Q. d. (P - AVC) × Q.
A production possibility graph slopes down because of:
A. the law of increasing costs. B. scarcity. C. inefficiency. D. unemployment.