Which of the following facts is not a basis for prospect theory in behavioral economics?
A. People evaluate gains and losses in relation to the status quo, not in absolute terms
B. People feel losses much more intensely than they feel gains
C. People experience diminishing marginal disutility for losses
D. People do not experience diminishing marginal utility for gains
D. People do not experience diminishing marginal utility for gains
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Jane is a top-level executive and is very rich. Jane just ordered a car only to be told that she will have to wait three weeks for it to be delivered. Which of the following statements is true?
A) The car is not a scarce good. B) The car is a scarce good. C) Because Jane has unlimited funds, she incurs no opportunity cost in buying the car. D) Jane paid too much for a car that wasn't ready on time
Refer to Figure 12-8. Suppose the firm produces 4,000 units. What does the shaded area labeled B represent?
A) the firm's economic loss B) average variable cost C) total fixed cost D) total variable cost
When the production of a good involves several inputs, an increase in the cost of one input will usually cause total costs to
A) rise more than in proportion. B) rise less than in proportion. C) remain unchanged. D) rise by the exact amount of the input price increase.
Suppose a company that produces furniture wax branches out into producing a dusting product like Lemon-Dust-Away. If this expansion is efficient, the company must
a. benefit from vertical integration b. benefit from horizontal integration c. experience economies of scale d. experience economies of scope e. have no transaction costs