Jim, an avid biker, broke his leg last year and will never be able to use his bike again. He was offered $100 for it last year, but Jim refused to sell it, insisting it was worth more. A year later, he's offered only $75 for it, but Jim still refuses to sell it. Jim's behavior could be explained by:
A. limited processing power.
B. the endowment effect.
C. status quo bias.
D. substitution effect.
B. the endowment effect.
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When regulating a natural monopoly, government officials
a. can set an efficient price, but the firm will suffer a loss b. can arrange a Pareto improvement by leaving the firm alone c. should force the firm to set a price equal to minimum marginal cost d. should force the firm to set a price equal to minimum long-run average total cost e. will increase efficiency if they force the firm to produce where MR = MC.
You paid $35 for a ticket (which is non-refundable) to see SPAM, a local rock band, in concert on Saturday. Assume that $35 is the most you would have been willing to pay for a ticket. Your boss called, and she is looking for someone to cover a shift on Saturday at the same time as the concert. You would have to work 4 hours and she would pay you $11/hr. The psychic cost to you of working is $2/hr. What is the opportunity cost of going to the concert?
A. $1 B. $9 C. $36 D. $35
Exhibit 23-1: Global Comparison of Government Surpluses and Deficits as a Percentage of GDP, 2016 ? Country Surplus (+) or Deficit (-) as a percent of GDP Canada -1.10 Iceland 12.57 Latvia 0.06 Norway 3.99 Spain -4.51 United States -4.94 Given the information in Exhibit 23-1, which of the following statements is correct?
A. Canada was the closest of the countries shown to balancing its budget. B. Norway likely had to sell government securities to finance its overspending. C. Iceland experienced the largest deficit of the countries shown. D. The national debts of Canada, Spain and United States increased in 2016.
Bertha does not expect any unforseen events but holds some of her savings as currency and coins placed in her sewing basket. This is an example of
A. precautionary demand for money. B. asset demand for money. C. transactions demand for money. D. speculative demand for money.