According to the adaptive rationality standard, people might choose to have unselfish preferences because:
A. they do not know how to make efficient choices.
B. people sometimes make irrational choices.
C. they have no other choice.
D. doing so could be in their own best interest.
Answer: D
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Refer to Table 2-9. What is Serena's opportunity cost of making a necklace?
A) 1/2 of a bracelet B) 1/2 of a necklace C) 3/4 of a bracelet D) 2 necklaces
An implication of the efficient markets hypothesis is that
A) only sophisticated investors will be able to earn above-normal profits from financial investments. B) above-normal profits are available only to major traders. C) above-normal profits will be eliminated in the trading process. D) unless he or she acts recklessly, the average investor should be able to make above-normal profits.
Cost-reduction generates
a. Increases in long-run profitability b. Increases in long-run profitability only if the cost reduction is difficult to imitate c. Decreases in long run profitability d. No change in profitability
Efficiency wages are:
A. wages deliberately set above the market rate in order to increase productivity. B. not a cause of unemployment. C. generally a disincentive for an employee to work hard to try to keep their job. D. All of these are true.