A car sells at different prices at different dealerships in a local market. If a consumer has imperfect information about the price of a car at each dealership, he should
a. always gather all available information about prices.
b. gather information about prices until the expected marginal benefit of more information equals the marginal cost of gathering it.
c. gather information about prices only if it can be gathered without cost.
d. ignore information about prices because it is irrelevant to making an "optimally imperfect" decision.
B
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Game theory is the study of ________
A) policy analysis B) strategic interactions C) program evaluation D) irrational decision making
Some nations that seek to produce all of their own needs face the problem that a. they can deplete their natural resources faster as a result
b. some industries are too small to be efficient if restricted to their domestic markets alone. c. the opportunity cost of producing some of their own goods is higher than that of trading with others for them. d. all of the above are true.
How do critics of discretionary stabilization policy view frequent changes in spending and tax policy?
A. The changes make the economy smoother, although it may not look that way to individual firms. B. The changes make life more difficult and hectic for Congress and the Fed. C. The changes smooth out the business cycle, making planning easier. D. The changes cause more instability in the economy and make planning more difficult.
The federal budget deficit can be reduced by
A) raising taxes. B) raising government spending. C) raising transfer payments. D) higher interest rates.