Behavioral economics is an approach to the study of consumer behavior
A. that, in contrast to standard approaches in economics, relies on real-world data to evaluate the usefulness of economic models.
B. that emphasizes the capabilities of individuals to succeed in attaining all their unlimited wants utilizing limited resources.
C. that, in contrast to standard approaches in economics, utilizes the ceteris paribus assumption.
D. that emphasizes psychological limitations and complications that potentially interfere with rational decision making.
Answer: D
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The quantity theory of money:
A) assumes that the ratio of money supply to nominal GDP decreases over time. B) assumes that the ratio of money supply to nominal GDP increases over time. C) is a representation of how a change in money supply affects the price level in an economy. D) is an exact representation of how the economy behaves in the long-run.
Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If 10,000 units of iced tea are sold
A) the marginal benefit of each of the 10,000 units of iced tea equals $3. B) marginal benefit is less than marginal cost. C) the deadweight loss is equal to economic surplus. D) producer surplus equals consumer surplus.
Equilibrium takes place where:
A. prices are maximized. B. supply is highest. C. supply and demand intersect. D. demand is highest.
Money spent on the purchase of a new house is included in the GDP as a part of:
a. Personal saving b. Investment c. Personal consumption expenditures d. The consumption of private fixed capital