According to the bounded rationality hypothesis, an individual confronting a large number of complicated choices is most likely to respond by
A) using a simple rule of thumb to choose among a subset of easiest-to-evaluate options.
B) using the ceteris paribus assumption to assist in simplifying and examining each of the possible options.
C) utilizing readily available empirical evidence to assist in evaluating every option.
D) assessing every available choice by developing sophisticated theories regarding each option.
Answer: A
You might also like to view...
What is the largest category of bank assets?
A) loans B) reserves C) securities D) cash items in the process of collection
Refer to the accompanying figure. If the market for doughnuts is perfectly competitive, then assuming this firm can earn enough revenue to cover its variable cost, it should produce:
A. the quantity of doughnuts at which average total cost is minimized. B. the quantity of doughnuts at which marginal cost equals the market price. C. 50 doughnuts per day. D. the quantity of doughnuts at which average total cost equals the market price.
If the external costs of production are NOT taken into account, then production will
A. be less than socially desirable. B. be the same since only prices are affected by externalities. C. be more than socially desirable. D. not continue.
Refer to the scenario above. The increase in output due to a one-unit increase in capital is smallest at point ________
A) A B) B C) C D) D