How have insights from the field of psychology influenced the thinking of economists in recent years?
Insights from psychology have led some economists to question the assumption of rationality that pervades mainstream economic models. Evidence from experimental economics does raise serious questions about the rationality assumption. For example, most people may be concerned with the fairness of outcomes, in addition to the impact of those outcomes on their own well-being. An open question is: If the rationality assumption does not really reflect the behavior of real economic actors, then how important is it that we model other motivations, such as the desire for fairness, the tendency to procrastinate, overconfidence, etc.?
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Assume that the state of Missouri decided to place a tariff on every product produced outside the state in an effort to increase the state's revenue and increase employment in the state. If Missouri did so,
A) the prices of goods imported into Missouri would fall. B) the state's total output would definitely increase. C) the standard of living within Missouri would decrease. D) workers with jobs in new firms replacing out-of-state imports would earn high income. E) other states would begin to dump in Missouri.
Which of the following pairs illustrates the two extreme examples of market structures?
a. perfect competition and oligopoly b. perfect competition and monopoly c. monopoly and monopolistic competition d. oligopoly and monopolistic competition