The long-run Phillips curve is a vertical line at the natural rate of unemployment

Figure 5-15

Hal initially consumes the combination marked as A in Figure 5-15. After his income increases, Hal consumes combination B. We can conclude that Hal views

a.
X as an inferior good and Y as a noninferior good.

b.
X as a noninferior good and Y as an inferior good.

c.
both X and Y as noninferior goods.

d.
both X and Y as inferior goods.

Answer the following questions true (T) or false (F)

1. A common mistake made by consumers is the failure to take into account the sunk costs of their actions. 2. The endowment effect is the tendency of people to be unwilling to sell a good they already own even if they are offered a price greater than they would be willing to pay to buy the good if they did not already own it. 3. Behavioral economics is the study of situations in which people make rational choices.