In examining consumer behavior, one of the constraints faced by consumers is
a. happiness
b. quantities consumed
c. tastes and preferences
d. entrepreneurial ability
e. income
E
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Behavioral economics extends traditional economic models by
A) including insights from psychology and human cognition models. B) modeling behavior rather than prices. C) admitting that individuals are irrational. D) admitting that incentives are very important.
Monetarists and classical economists think very much alike, certainly when compared to Keynesians. For example, they both assume that the
a. velocity of money is constant b. changes in money supply changes GDP c. economy operates at full employment d. price level is constant e. interest rate has no impact on investment
The largest asset of the Fed from those on this list is
A. currency outstanding. B. loans to depository institutions. C. U.S. Treasury securities. D. mortgage-backed securities.
If the price of a DVD falls from $20 to $12 and the quantity of DVDs supplied decreases from 118,000 per hour to 100,000 per hour, using the midpoint formula the elasticity of supply equals
A) 0.33. B) 2.94. C) 3.08. D) 0.23. E) -3.08.