The fact that the price of diamonds is higher than the price of water
A. can be explained as the outcome of a consumer optimum in consumer choice theory.
B. is an outcome of irrational behavior in consumer choice theory.
C. cannot be explained by behavioral economics or consumer choice theory.
D. can be explained only by behavioral economics but not by consumer choice theory.
Answer: A
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When two countries choose to use a new currency, they are
A) participating in a monetary union. B) dollarizing. C) forming an optimal currency area. D) increasing their monetary autonomy.
A likely way to increase the productivity of workers engaged in research and development is to ________
A) increase the size of the labor force B) increase the number of workers engaged in research and development C) invest more in the education of scientists D) increase the national saving rate
Energy drinks and granola bars are normal goods. When the price of energy drinks decreases, the income effect causes a
a. shift to a lower indifference curve, and the consumer buys fewer granola bars. b. shift to a higher indifference curve, and the consumer buys more granola bars. c. movement along the indifference curve, and the consumer buys fewer granola bars. d. movement along the indifference curve, and the consumer buys more granola bars.
The theory of ______ advantage was the first to attack the tenet of mercantilism which implied that trade is a zero-sum game
Fill in the blank(s) with the appropriate word(s).