According to behavioral economics, advertising works because it:

A. provides useful information that improves consumers' ability to make decisions.
B. exploits the self-serving bias.
C. exploits the recognition heuristic.
D. quickly communicates price changes that exploit the law of demand.


Answer: C

Economics

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If the real interest rate rises, then the

A) quantity of saving decreases and there is a movement down along the supply of loanable funds curve. B) quantity of saving increases and there is a movement up along the supply of loanable funds curve. C) supply of saving increases and the supply of loanable funds curve shifts rightward. D) supply of saving decreases and the supply of loanable funds curve shifts leftward. E) demand for investment decreases and the demand for loanable funds curve shifts leftward.

Economics

An increase in which of the following leads to a decline in the monetary base?

A) float B) discount loans C) foreign deposits at the Fed D) SDRs

Economics

If a production possibilities frontier (PPF) is concave outward, it follows that

A) opportunity costs are constant between two goods. B) the opportunity cost (of producing the good on the horizontal axis) rises as more of the good is produced. C) the opportunity cost (of producing the good on the horizontal axis) falls as more of the good is produced. D) the opportunity cost (of producing the good on the horizontal axis) first rises and then falls as more of the good is produced. E) none of the above

Economics

Refer to the accompanying figure. Relative to point B, at point C this restaurant is:

A. making fewer pizzas and more salads. B. operating more efficiently. C. making more pizzas and more salads. D. making more pizzas and fewer salads.

Economics