Behavioral economics is an approach to the study of consumer behavior
A) that emphasizes psychological limitations and complications that potentially interfere with rational decision making.
B) that emphasizes the capabilities of individuals to succeed in attaining all their unlimited wants utilizing limited resources.
C) that, in contrast to standard approaches in economics, utilizes the ceteris paribus assumption.
D) that, in contrast to standard approaches in economics, relies on real-world data to evaluate the usefulness of economic models.
Answer: A
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Automatic stabilizers
A) are never altered. B) often make any downturn in the economy worse. C) must be determined by the Congress in each budget. D) work counter-cyclically to moderate the business cycle.
To maximize profits, the discriminating monopolist sells abroad rather than selling additional units at home because:
a. the home market is just too competitive. b. there would be more incentive for entry from other firms. c. the market price at home would rise and the firm would lose customers. d. it would lower total profits if it lowered its home price in order to sell the additional units.