On a vacation to China, you find yourself eating every meal at the local Burger King rather than buying a meal from one of the street vendors. Your traveling companion claims that you are irrational, since you never eat Burger King hamburgers when you are home, and Burger King's hamburgers cost more than the meals prepared and sold by China's street vendors. An economist would most likely explain
your behavior by suggesting that
a. your behavior is rational, but your friend's behavior is clearly irrational.
b. you are clearly irrational, but your friend's behavior is rational.
c. the Burger King brand name suggests consistent quality.
d. the advertising by Burger King in China is more persuasive than the advertising by Burger King in your home town.
c
You might also like to view...
In liquidity preference theory, an increase in the interest rate, other things the same, decreases the quantity of money demanded, but does not shift the money demand curve
a. True b. False Indicate whether the statement is true or false
Cory has just graduated from veterinary school. He can earn $40,000 working at a small animal clinic or $50,000 working with farm animals and horses where the risks of getting injured by an animal are higher. The higher salary to work with larger animals is an example of
a. a compensating differential. b. signaling theory. c. an efficiency wage. d. efficient union bargaining.
Economic profits are:
A. Always larger than accounting profits B. The sum of accounting profits and implicit costs C. Equal to the difference between total revenues and implicit costs D. Equal to the difference between accounting profits and implicit costs
Explain how each of the following events would affect the short-run aggregate supply curve
a. A decrease in the price level b. A decrease in what the price level is expected to be in the future c. A price level that is currently lower than expected d. An unexpected decrease in the price of an important raw material e. A decrease in the labor force