According to behavioral economists, precommitments:
A. help people overcome their self-control problems caused by time inconsistency.
B. do not fundamentally alter decisions because they do not change the benefits or costs of a
particular action.
C. end up being more costly as people regularly violate them and incur penalties.
D. overcome cognitive biases introduced by brain System 2.
Answer: A
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Consider the budget line in the above figure. If the consumer has income of $240, what is the relative price of movies?
A) .42 books B) 2.4 books C) $10 per movie D) $24 per movie
A firm will hire additional units of any input up to the point where
a. the marginal productivity of the input is maximized. b. the marginal cost of employing the input is minimized. c. the expense of employing the last unit is equal to the revenue brought in by the last unit. d. the revenue brought in by the input is maximized.