Carla is deciding whether to go to the movies this afternoon. Behavioral economists predict Carla likely will:
A. over-value her opportunity cost.
B. have a difficult time accurately valuing the benefit of the movie.
C. have a hard time accurately valuing her opportunity cost of the movie.
D. All of these are true.
Answer: C
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Suppose the price of skateboards were to fall. Other things constant, what is the least likely to occur?
A) More skateboards will be purchased. B) The demand for skateboards will increase. C) More helmets will be purchased. D) The demand for helmets will increase.
Eli Whitney is most noted for
a. inventing the steam engine. b. inventing the cotton gin. c. inventing the technology for the first railroad engine. d. developing the Erie Canal.
A tax on cigarettes:
A. increases total surplus. B. increases efficiency in the market. C. will increase both total surplus and efficiency in the market. D. like any tax, will always reduce surplus and efficiency in markets.
If production of a good creates beneficial externalities, a perfectly competitive market will produce
A. less output than would maximize profit. B. more output than would maximize profit. C. less output than is socially efficient. D. more output than is socially efficient.