Which of the following is a property of an S-shaped curve that corresponds to the prospect theory value function?
A) The curve passes through the reference point at the origin.
B) Both sections of the curve are convex to the horizontal, outcome axis.
C) The curve is symmetric with respect to gains and losses.
D) None of the above.
A
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Beginning at the horizontal axis intercept, as a consumer moves upward along the budget line, he will find that
a. the marginal utility per dollar spent on the vertical axis good increases b. the marginal utility per dollar spent on the horizontal axis good increases c. the marginal utility per dollar spent on the horizontal axis good decreases d. the marginal utilities per dollar spent on both goods increase e. the marginal utilities per dollar spent on both goods remain constant along that particular budget line
The concept that increases in spending cause larger increases in equilibrium GDP is known as the
a. profiler. b. mystifier. c. multiplier. d. depreciator.