Behavioral economists have found that people ______________, and this leads to irrational decisions.
A. often forget money is fungible
B. often undervalue opportunity costs
C. often forget to ignore sunk costs
D. All of these statements are correct.
D. All of these statements are correct.
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Firms that face capacity constraints can only increase output only up to the capacity, but no further. Therefore, firms
a. Should price to capacity as long as MR > MC b. Should price to capacity as long as MR = MC c. Should price to capacity as long as MR < MC d. Should not take capacity into consideration in pricing decisions
The actual budget deficit of the federal government in 2009 was about $1.4 trillion. On the basis of this information, it:
A. can be concluded that the economy was faced with serious inflation in 2009. B. cannot be determined whether the government engaged in expansionary or contractionary fiscal policy in 2009. C. can be concluded that fiscal policy was contractionary in 2009. D. can be concluded that fiscal policy was expansionary in 2009.