How might a behavioral economist explain the endowment effect?
a. People always seek to maximize their marginal utility, even if their behavior is irrational.
b. People are more likely to cheat other people if it will raise their personal status above the status of others.
c. The only way people can maximize their marginal utility is to pretend their personal property is highly valuable.
d. People tend to use their personal history as a reference point for the value of an item rather than the market price.
d. People tend to use their personal history as a reference point for the value of an item rather than the market price.
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"The market has failed to provide enough rental housing in New York City. This demonstrates another failure of free markets-they may lead to shortages of necessities." Explain why you agree or disagree
If Alexander has a positive rate of time preference, he will
a. prefer to have goods now rather than two years from now. b. prefer to have goods two years from now rather than during the current period. c. prefer apples to oranges. d. be unwilling to pay an interest rate in order to acquire purchasing power now.
Economies of scale commonly arise because of coordination problems
a. True b. False Indicate whether the statement is true or false
Any point inside a production possibilities curve indicates:
A) unemployment and/or inefficiency. B) that the law of increasing opportunity costs is no longer valid. C) that society doesn't want more of either good. D) that economic growth is no longer possible.