Rational ignorance occurs when
a. voters find the cost of understanding a specific issue is greater than the expected benefit
b. legislation generates large benefits for a few people but imposes costs on many people
c. the preferences of the median voter dominates public choices
d. individuals or firms attempt to obtain favorable treatment from government officials
e. people make public decisions based on emotion rather than a rational analysis
A
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Which of the following is a flow in the circular flow model?
A) the flow of profit and the flow of revenue B) the flow of income earned by firms and the flow of expenditures earned by households C) the flow of revenue received by firms and the flow of payments to resource owners D) the flow of goods and services from households to firms
Once wartime spending is under way and production is diverted away from household consumption items and private investment goods,
(a) real Gross National Product will likely fall. (b) the money supply will automatically increase. (c) inflation will likely rear its ugly head if productivity does not advance. (d) production and employment will fall.
De jure discrimination refers to a situation where blacks and whites attend segregated schools due to circumstances, not edict
Indicate whether the statement is true or false
Why do economists sometimes treat decision makers as boundedly rational?