The endowment effect in behavioral economics refers to how people:
A. value things more if they own them.
B. are averse losses in a game of chance such as poker.
C. avoid the loss of something of high value.
D. prefer stock market gains over losses.
Answer: A
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Define and explain how we calculate the marginal propensity to consume and the marginal propensity to save
What will be an ideal response?
Stock prices change when
A) expectations are based on past performance B) expectations change. C) accounting profits are zero. D) none of these choices.
Which of the following are characteristics of a Perfectly Competitive Industry?
(a) Few buyers and sellers. (b) Heterogeneous products. (c) Homogeneous products. (d) Barriers to entry and exit.
The perfectly competitive firm maximizes profits when
A) it produces and sells the quantity at which the difference between marginal revenue and marginal cost is the greatest. B) it produces and sells the quantity at which marginal revenue and marginal cost are equal. C) it produces and sells the quantity at which the difference between average revenue and average cost is the greatest. D) it produces and sells the quantity at which the difference between price and average cost is the greatest.