The fact that the price of diamonds is higher than the price of water
A) cannot be explained by behavioral economics or consumer choice theory.
B) is an outcome of irrational behavior in consumer choice theory.
C) can be explained only by behavioral economics but not by consumer choice theory.
D) can be explained as the outcome of a consumer optimum in consumer choice theory.
Answer: D
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The steeper an isoquant is,
A) the greater is the marginal productivity of labor relative to that of capital. B) the greater is the substitutability between capital and labor. C) the greater is the need to keep capital and labor in fixed proportions. D) the greater is the level of output.
When the IMF provides loans to developing countries, it often requires these countries to adopt:
A. a contractionary fiscal policy and an expansionary monetary policy. B. contractionary monetary and fiscal policies. C. expansionary monetary and fiscal policies. D. a contractionary monetary policy and an expansionary fiscal policy.
Which of the following is the best example of a System 2 decision and action?
A. Marty learns that his usual driving route to work will have significant delays due to construction but forgets and goes that way anyway. B. Doug eats a whole plate of nachos despite the fact it compromises his carefully planned diet. C. Bruce "goes with his gut" when choosing between two kinds of motorcycles to purchase. D. Chuck, who has contemplated a job change for a month and has other offers, chooses to quit when his boss makes him mad.
What is the difference between explicit collusion and implicit collusion?
What will be an ideal response?