Because every policy change generates winners and losers, loss aversion generates:
A. status quo bias.
B. anchoring and adjustment.
C. fungibility.
D. regression to the mean.
Answer: A
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A product's price approaches its marginal cost as market concentration increases
Indicate whether the statement is true or false
Using the information in situation 20-2, if government increases their spending by $50 and increases net taxes by 50, then equilibrium aggregate output will change by
A) -$100. B) -$50. C) $50. D) $100.
If the price of pork rinds falls, then the substitution effect due to the price change will cause
A) an increase in the demand for pork rinds. B) an increase in the demand for corn chips, a substitute for pork rinds. C) an increase in the quantity of pork rinds demanded. D) a decrease in the quantity of pork rinds demanded.
If the production possibilities frontier is ________, then opportunity costs are constant as more of one good is produced
A) bowed out B) bowed in C) non-linear D) linear