Suppose you were asked, "Can you guess the height of the tallest living man? Is it more than 8 feet?" When people suggest an answer in the question they ask, it is a form of:
A. anchoring.
B. rule of thumb.
C. time inconsistency.
D. positive framing.
A. anchoring.
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Refer to the scenario above. Which of the following shifts will increase the total cost?
A) Shift from apartment Close to Far B) Shift from apartment Far to Very Far C) Shift from apartment Very Close to Close D) Shift from apartment Very Far to Extremely Far
What factors are most important for determining exchange rate fluctuations in the long run?
A) preferences for domestic and foreign goods across countries B) relative rates of productivity growth across countries C) relative price levels across countries D) All of the above are correct.
As a form of business, a partnership
A) cannot issue stock. B) has limited liability. C) has the most government rules and regulations affecting it. D) has only one owner.
What is the difference between "diminishing marginal returns" and "diseconomies of scale"?
A) Both concepts explain why marginal cost increases after some point but diminishing marginal returns applies only in the short run when there is at least one fixed factor, while diseconomies of scale applies in the long run when all factors are variable. B) Diminishing marginal returns, which applies only in the long run when all factors are variable, explains why average variable cost increases, while diseconomies of scale, which applies in the short run when at least one factor is fixed, explains why average total cost increases. C) Diminishing marginal returns, which applies only in the short run when at least one factor is fixed, explains why marginal cost increases, while diseconomies of scale, which applies in the long run when all factors are variable, explains why average cost increases. D) Both concepts explain why average total cost increases after some point but diminishing marginal returns applies only in the short run when there is at least one fixed factor, while diseconomies of scale applies in the long run when all factors are variable.