Which of the following assumptions about human behavior is most likely to be accepted by behavioral economists?
A. People have preferences that are unstable and vary by context.
B. People are almost entirely self-interested in their behavior.
C. People plan out decisions well and possess lots of willpower.
D. People eagerly and accurately calculate the benefits and costs of their decisions.
Answer: A
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Unemployment benefits in western Europe are more generous than in the United States. As a result, ________ in the United States
A) frictional unemployment is higher B) frictional unemployment is lower C) cyclical unemployment is higher D) structural unemployment is higher E) avoidable unemployment is lower
Assume you have been hired to advise two different firms, A and B, regarding the price each firm should charge for its product, focusing on the amount each firm should mark up price over marginal cost
While both firms are price setters, the product produced by firm A is extremely unique and enjoys widespread appeal. In contrast, firm B sells a fairly standard product for which there are are several good, but not perfect, substitutes. How would your advice to each firm differ? How does the price elasticity of demand influence your recommendations?
When we say that the financial crisis can be viewed as a balance sheet problem, this is descriptive of
A) banks' assets being greater than their liabilities. B) banks possessing assets that are declining in value, resulting in banks approaching insolvency. C) banks having low leverage ratios. D) banks engaging in regulatory capital arbitrage. E) none of the above
When the dollar value of a country's imports of final products is less than the dollar value of its exports, the country has a
A. balance of trade deficit. B. budget surplus. C. budget deficit. D. balance of trade surplus.