Scientists studying human behavior have found that people tend to:
A. Always make rational decisions
B. Make systematic errors in their decisions
C. Make only random errors in their decisions
D. Always make decisions that are not rational
B. Make systematic errors in their decisions
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In a market characterized by many sellers, if an outsider devises a way to reduce transaction costs it will:
a. benefit both buyers and sellers. b. cause both buyers and sellers to lose. c. benefit the buyers but cause the sellers to lose. d. benefit the sellers but cause the buyers to lose.
Use the following graph for a market to answer the question below.
Which of the following could not explain the indicated increase in equilibrium price from P1 to P2?
A. an increase in production costs B. an increase in consumer incomes C. an increase in the price of a substitute product D. a decrease in the price of a complementary product