Why do some people tip generously at restaurants to which they never plan to return?
What will be an ideal response?
Some people tip generously at restaurants to which they never plan to return due to their social preferences, meaning that the individual's benefits are defined not only by his or her payoffs but also by the payoffs of others. Social preferences often play an important role in economic transactions.
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The fact that consumers often react more to changes in the posted price of a good as compared to changes in the sales tax that is not posted is an example of
A) salience. B) salinity. C) stupidity. D) rational ignorance.
An increase in the marginal propensity to save from .3 to .4 will cause
A) the ZZ line to become steeper and a given change in autonomous consumption (c0 ) to have a smaller effect on output. B) the ZZ line to become steeper and a given change in autonomous consumption (c0 ) to have a larger effect on output. C) the ZZ line to become flatter and a given change in autonomous consumption (c0 )) to have a smaller effect on output. D) the ZZ line to become flatter and a given change in autonomous consumption (c0 ) to have a larger effect on output.