Behavioral economics refers to the study of situations
A) where consumers and firms appear to make choices that are appropriate to reach their goals.
B) where consumers and firms appear to value fairness when they make choices.
C) where consumers and firms disobey the laws of demand and supply.
D) where consumers and firms do not appear to be making choices that are economically rational.
Answer: D
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Which of the following would be a consequence of substitution bias in the CPI?
A) Judges would award child support payments that would not adequately keep up with the true cost of inflation. B) Businesses would overcompensate employees for inflation when giving cost of living raises. C) Social Security payments would not adequately compensate retired workers for inflation. D) The inflation rate based on the CPI would underestimate the true level of inflation.
Suppose earnings are given by E = $60 + $7(24 ? L), where E is earnings and L is the hours of leisure. How much is this person working if her daily earnings are $116?
A. 12 hours B. 18 hours C. 16 hours D. 8 hours
The lack of investment in developing countries is at least in part attributable to:
A. high levels of foreign aid. B. low levels of domestic savings. C. inappropriate education. D. overpopulation.
If MR < MC, a monopolist should:
A. increase production. B. decrease production. C. maintain the same level of production. D. stop producing.