Corey has a blue sweater and a denim jacket. On some days he chooses to wear the sweater but on others he chooses to wear the jacket. Economists would most likely conclude that:
A. Corey’s preferences have changed.
B. Corey’s preferences have not changed, but other factors may have changed such as the temperature outside.
C. Corey is irrational if he wears different clothing on different days.
D. Corey is indifferent between wearing a jacket or a sweater.
B. Corey’s preferences have not changed, but other factors may have changed such as the temperature outside.
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When lenders are unable to get good information about the worthiness of a project the lender has the problem of
A) adverse selection. B) moral selection. C) moral hazard. D) adverse hazard.
When production in an economy grows more quickly than the population in that economy, which of the following must be occurring?
A) Incomes are growing at a slower rate than the population. B) Real GDP per capita is rising. C) Living standards are falling. D) Real GDP is falling.