Paul wins a $500 watch in a sweepstakes and decides to keep it, even though he says he would have preferred to win $500 cash. Knowing Paul's preferences, how can we explain his decision to keep it?
A. Paul has a cognitive bias, and it leads him to value the watch more because he owns it.
B. Paul has a cognitive bias; he is ignoring a nonmonetary opportunity cost of already owning the watch.
C. Paul's implicit cost of ownership makes him feel as though he should keep the watch.
D. All of these are true.
D. All of these are true.
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Suppose the government launches a successful advertising campaign that convinces workers with high school degrees to quit their jobs and become full time college students. This would cause
A) the unemployment rate to decrease. B) the number of discouraged workers to increase. C) no change in the unemployment rate. D) the labor force participation rate to decrease.
The portion of consumer surplus that no one in society is able to obtain in a situation of monopoly is known as
A) a market failure. B) a deadweight loss. C) an unrealized loss. D) a market externality.
A monopolist has no supply curve because
a. as demand changes, each output level can be consistent with more than one profit-maximizing price b. monopolists tend to restrict output c. monopolists have no marginal cost curve d. monopolists can charge any price they want e. as demand changes, the firm's profit-maximizing choice of output may change
The kinked demand curve model of oligopoly explains why oligopoly
a. firms cannot maximize their profits b. firms do not lower prices to increase market share c. firms tend to increase price d. firms tend to decrease price to their minimum ATC e. tends to generate a higher economic profit than in any other market structure