When people face bounded rationality, they are likely to
A. do nothing.
B. consider every conceivable choice available to them when making decisions.
C. rely on simple rules of thumb.
D. behave irrationally.
Answer: C
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____________ solves the mutual coincidence of wants problem
a. Barter b. Mercantilism c. Free trade d. Money
The simple spending multiplier understates the amount by which output changes
a. True b. False Indicate whether the statement is true or false
People are willing to give up monetary rewards to promote fairness
a. True b. False Indicate whether the statement is true or false
Suppose that books are measured on the horizontal axis and CDs are measured on the vertical axis. As long as the law of demand holds for books, than an increase in the price of books will generate a price-consumption curve that traces a path:
A. to the left. B. to the right. C. upward. D. downward.