Answer the following statement true (T) or false (F)
1) Neoclassical theory suggests that to the extent impulse buying occurs, it is infrequent and
does not affect the ability of economic models to predict behavior.
2) Placement of goods in grocery and other retail stores is often done with the objective of
encouraging impulse buying.
3) Heuristics generally help people make fewer errors in their decisions.
4) Heuristics generally help people make fewer errors in their decisions.
1) T
2) T
3) F
4) T
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What factors determine the demand for money in the Baumol-Tobin analysis of transactions demand for money? How does a change in each factor affect the quantity of money demanded?
What will be an ideal response?
If investment becomes more interest-sensitive,
A) monetary policy will have a smaller impact on the equilibrium interest rate. B) monetary policy will have a greater impact on equilibrium income. C) fiscal policy will have a smaller impact on equilibrium income. D) fiscal policy will have a larger impact on the equilibrium interest rate.
When a firm’s fixed cost rises, its total profit curve shifts
A. up at every output level. B. down at every output level. C. left at every profit level. D. right at every profit level.
Game theory suggests that in the trust game:
A. trustees will be untrustworthy and will forego potentially profitable investments. B. trustees will be trustworthy and will pursue all potentially profitable investments. C. trustees will be untrustworthy, but will pursue all potentially profitable investments. D. trustees will be trustworthy, but will forego potentially profitable investments.