Behavioral economics suggests that people face human limitations that prevent them from examining every possible choice available to them, with the implication that
A) the consumer optimum implied by utility theory is an inappropriate approach to deriving demand curves.
B) the consumer optimum implied by utility theory is an appropriate approach to deriving demand curves.
C) marginal utility is always equal to zero.
D) marginal utility is always negative.
Answer: A
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The demand curve for the product of a perfectly competitive firm is
A) downward sloping. B) upward sloping. C) perfectly inelastic. D) perfectly elastic.
The difference between short-run and long-run cost is that in the short run,
a. there are shortages of labor that can restrict output b. only labor can be changed to increase or decrease production c. fixed factors of production have already been chosen d. the market-day supply limits the amount by which producers can change production e. all factors of production are variable