Sam needs to have his car serviced. There is an auto repair shop located nearby that does a lot of business and has an online rating of 4 out of 5 stars. Sam takes his car to be serviced and thinks the service person is grumpy and that his car is still not running as well as it could be. Sam then makes a point of telling his friends not to use the repair shop. Sam's actions illustrate which of
the following systematic mistakes that people make when making decisions?
a. People are overconfident.
b. People give too much weight to a small number of vivid observations.
c. People are reluctant to change their minds.
d. All of the above are correct.
b
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A sales tax on sellers a good leads to a loss of consumer surplus, but a price ceiling or a price floor on that same product will not
Indicate whether the statement is true or false
Which of the following exchange rate systems have a legislative commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate?
a. Gold standard b. Gold exchange standard c. Crawling band d. Horizontal band e. Currency board
Suppose you win a small lottery and you are given the following choice: You can (1) receive an immediate payment of $10,000 or (2) three annual payments, each in the amount of $3,600, with the first payment coming one year from now, the second two years from now, and the third three years from now. You would choose to take the three annual payments if the interest rate is
a. 2 percent, but not if the interest rate is 3 percent. b. 3 percent, but not if the interest rate is 4 percent. c. 4 percent, but not if the interest rate is 5 percent. d. 5 percent, but not if the interest rate is 6 percent.
The most important indirect taxes in the United States are
A. federal and state income taxes. B. inheritance taxes. C. corporate profits taxes. D. sales and property taxes.