Buck carefully plans out an early morning exercise routine to lose weight and get fit. When it's time to work out, however, Buck just "doesn't feel up to it" and decides to sleep in. Behavioral economics would say that Buck:
A. weighed the costs and benefits and made a rational economic decision to sleep in.
B. used System 1 of his brain to formulate his workout plan, but then gave in to System 2
when he chose to sleep in.
C. used System 2 of his brain to formulate his workout plan, but then gave in to System 1
when he chose to sleep in.
D. is fundamentally lazy and incapable of sticking to a workout plan.
Answer: C
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Jack exported a rare painting illegally. This transaction will:
A) cause the GDP of his country to increase. B) not affect the calculation of his country's GDP. C) cause the GDP of the country he has exported it to increase. D) cause the GDP of his country to decrease.
A decrease in the number of workers hired by a firm could result from
A) an increase in the marginal product of labor. B) an increase in the marginal revenue product of labor. C) an increase in the real wage. D) a decrease in the real wage.
In the DMP model, a decrease in productivity
A) decreases the unemployment rate. B) reduces the vacancy rate. C) increases the unemployment rate. D) increases the size of the labor force.
Most taxes distort incentives and move the allocation of resources away from the social optimum. Why do corrective taxes avoid the disadvantages of most other taxes?
a. Corrective taxes apply only to goods that are bad for people's health, such as cigarettes and alcohol. b. Because corrective taxes correct for market externalities, they take into consideration the well-being of bystanders. c. Corrective taxes provide incentives for the conservation of natural resources. d. Corrective taxes do not affect deadweight loss.