People will consistently sit through terrible movies at the theater instead of leaving early. This behavior makes no sense because it implies people are:
A. ignoring sunk costs, which is irrational.
B. focusing on sunk costs, instead of thinking at the margin.
C. thinking at the margin, instead of focusing on sunk costs.
D. not thinking at the margin, which is rational.
B. focusing on sunk costs, instead of thinking at the margin.
You might also like to view...
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Which one of the following statements best describes a price ceiling?
a. A price ceiling causes demand to change. b. A price ceiling causes supply to change. c. A price ceiling keeps a price from rising above a certain level. d. A price ceiling keeps a price from falling below a certain level.
For each watch Switzerland produces, it gives up the opportunity to produce 50 pounds of cheese. Germany can produce one watch at a cost of 100 pounds of cheese. Which of the following is true?
a. The opportunity cost of producing watches is lower in Switzerland. b. The opportunity cost of producing cheese is lower in Switzerland. c. The opportunity cost of producing watches is the same in both countries. d. It is impossible to compare costs because the two countries are not the same size. e. In Germany, the cost of a pound of cheese is one watch.
A decrease in income will lead to an increase in the demand for an inferior good.
Answer the following statement true (T) or false (F)