Neoclassical economics and behavioral economics:
A. are generally viewed as complementary, together providing better understanding of
economic behavior than each could on its own.
B. are diametrically opposed to each other.
C. generally address different issues in economics, and therefore rarely intersect on the same
topic.
D. both start from the premise that people are fundamentally rational in their decision making.
Answer: A
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Refer to the table above. What is the market demand for wine when the price is $1?
A) 50 units B) 80 units C) 51 units D) 76 units
Sometimes, when goods are produced and consumed, side effects are felt by people who are not directly involved in the market exchanges. In general, these side effects are called
A. Coase effects. B. externalities. C. public goods. D. internalities. E. none of the above
According to strategic trade policy, international trade largely involves firms that:
a. enjoy monopolistic power in the domestic market. b. have a high initial cost of production. c. pursue economies of scale. d. have high opportunity costs. e. generate adequate employment in the domestic economy.
Saving is motivated by private property rights because
A. people can wait for others to work hard and then try to take it. B. without those rights, consumers would be compelled to immediately consume them, whether or not they feared their savings would be taken. C. people must consume the proceeds of their hard work immediately. D. people need neither immediately consume nor spend energy protecting the proceeds from their hard work.