Sandy is a big Star Wars fan and buys a $20 ticket a week in advance to the premier of the new movie. After arriving at the theater, she realizes she left the ticket at home and doesn't have time to return home and get it. Sandy can buy another ticket for $20. She decides not to because seeing the movie isn't worth $40 to her. This is an example of:
A. rational behavior because she values the movie less than $40
B. irrational behavior because she really values the movie more than $40
C. irrational behavior because the initial $20 is a sunk cost.
D. rational behavior because it is a commitment device to never forget a ticket at home again.
B. irrational behavior because she really values the movie more than $40
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What will be an ideal response?
What is a normative statement? Give an example
What will be an ideal response?
Rent seeking reduces our economy's overall efficiency by
a. getting government to adopt legislation that actually reduces production b. disseminating market information c. lowering taxes d. getting voters more interested in politics e. reducing equity
Economists dismiss the idea that lower tax rates can lead to higher tax revenue, because there is a consensus that the relevant elasticities of demand and supply are very low
a. True b. False Indicate whether the statement is true or false