Behavioral economics is the study of situations in which people make rational choices
Indicate whether the statement is true or false
FALSE
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During the 1870s, ___ surpassed ___ as the leading source of power
a. animals; humans b. water; animals c. steam; water d. electricity; steam
A decrease in both supply and demand will lead to a decrease in equilibrium quantitY
a. true b. false
Which statement is true?
A. Rent, but not the interest rate is determined by supply and demand. B. The interest rate, but not rent, is determined by supply and demand. C. Both rent and the interest rate are determined by supply and demand. D. Neither rent nor the interest rate is determined by supply and demand.
After enjoying a perfectly delicious meal, Duane treats himself and orders a very expensive dessert. After one bite, Duane realizes he does not care for it at all. He chokes it down while thinking about the money he just wasted on it. Duane's decision to eat the entire dessert is an example of:
A. irrational behavior. B. a cognitive bias, because he is focused on the money spent on the dessert. C. emphasizing a sunk cost instead of weighing marginal costs and benefits. D. Duane's behavior exemplifies all of these.