Prospect theory can explain why
A) people tend to gamble on long odds with small expected utility.
B) people tend to sell their losing stocks and keep their winning stocks.
C) people should only sell their losing stocks.
D) people should never play the lottery.
B
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Okun's Law states that
A) there is a relationship between the unemployment rate, real GDP, and potential GDP. B) supply creates its own demand. C) as the unemployment rate rises, the inflation rate falls. D) a higher inflation rate leads to a higher nominal interest rate. E) as the real wage rate falls, the quantity of labor demanded increases.
Increasing returns to scale result when
A) in the long-run, an increase in inputs will lead to an increase in the average products of inputs. B) in the long run, an increase in inputs will lead to an equivalent increase in output. C) labor becomes more skilled. D) All of the above