According to prospect theory,
A) people are concerned with wealth levels only.
B) people are concerned with changes in wealth levels only.
C) people never use a reference level when making their decisions.
D) everybody is risk-neutral.
B
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A decline in real income
a. can occur only if there is a decline in nominal income b. can occur only if there is an increase in the price level c. can occur only if there is either a decline in nominal income or an increase in the price level d. cannot occur if there is either an increase in nominal wages or a decline in the price level e. can occur only if there is a decline in the price level
When the quantity demanded and quantity supplied in a market are equal, the market is said to be in
a. fixation. b. excess supply. c. equilibrium. d. excess demand.