An economist encounters some unexpected behavior in a market or laboratory setting. How can he or she distinguish between behavior resulting from mistakes by decision makers as opposed to being decisions based on unusual preferences?
a. If the same behavior is observed repeatedly even after opportunities to learn are provided, it is probably not a mistake.
b. If the behavior is observed more often with inexperienced subjects, it is likely a mistake.
c. Both a and b.
d. It is impossible to distinguish between mistakes and unusual preferences empirically.
c
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Refer to the table above. The farmer increased his total production of corn by 9 bushels per acre after applying
A) the first bag of fertilizer. B) the second bag of fertilizer. C) the third bag of fertilizer. D) the fourth bag of fertilizer.
Holding a currency to the gold standard works:
A. to the advantage of savers at the expense of borrowers. B. to the advantage of borrowers at the expense of savers. C. for no one, and hurts both savers and borrowers from access to money. D. for everyone, benefiting both savers and borrowers.
Calculate the internal rate of return for a machine that costs $500,000 and provides annual revenue of $115,000 per year for 5 years. You can assume all revenue is received once a year at the end of the year.
What will be an ideal response?
Which of the following statements is TRUE about the success of the World Bank?
A. The World Bank has been successful because it has focused on its primary function of making loans to governments. B. The World Bank has not been successful because it has focused on making loans to governments where there has been a loss of confidence in a nation's financial system. C. The World Bank has not been successful because many loans have been made to countries that can attract private funds. D. The World Bank has been very successful in promoting economic growth because loans have been primarily made to countries that have trouble attracting private funds.