Behavioral economic policy is likely to:
A. be based on the assumption of rationality.
B. take into account people's predictably irrational behavior.
C. suggest no government involvement.
D. assume that the way choices are presented doesn't affect the decision made.
Answer: B
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Refer to the figure above. When the supply curve of flash drives is S2 and the demand curve of flash drives is D, what is the surplus in the market when the price is $7?
A) 0 units B) 10 units C) 20 units D) 40 units
The best measure of a country's standard of living is
A) total nominal GDP. B) GDP per unit of capital. C) GDP per capita. D) GDP per labor hour.
In our simple trade model, having a comparative advantage in a product implies that a country will specialize completely in the product
A) with the highest opportunity cost. B) with the lowest opportunity cost. C) where total output is lower per worker-hour. D) where total output is greater per worker-hour.
Perfectly competitive firms ____ earn zero economic profit in long-run equilibrium because ____.
A. always; firms in perfectly competitive industries always maximize output and so flood the market until the equilibrium price of output is driven to zero B. sometimes; the demand curve for an individual perfectly competitive firm may or may not cross the company’s long-run average total cost curve at its lowest point C. always; firms enter whenever their economic profit is positive and exit whenever it’s negative, so in long-run equilibrium economic profit must always be zero D. never; no firm would be willing to produce if it received zero economic profit