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The behavioral economist Robert Frank speaks of the bounded nature of rationality in his 2008 interview (Challenge 2008) and discusses the axiom of the independence of irrelevant alternatives in rational choice theory. Using the examples he uses, discuss this topic in your own words.
If decision makers do not bear the major wealth effects of decisions, then:
If the MPC=0.8 and planned autonomous investment increases by $80 billion, then equilibrium real GDP will increase by
XBC Inc. is planning to buy a new car. Model A costs $22,000 and is expected to have a life of 4 years. Model B costs $35,000 but it is expected to last 6 years. The salvage value is expected to be 10% of original cost for either model. Using annual ..
During the Reagan administration, the Laffer curve was used to argue that:
The short-run equilibrium for a profit maximizing monopolistically competitive firm is at price = $29, average total cost = $22. The firm's marginal cost is $18. Which of the following is true? Similarily, a neighborhood convenience store is generall..
Assume that the Demand curve is given as Q=250-5P and the supply curve as P=10+Q. What would be the price and quantity with perfectly competitive markets? What will happen to price and quantity if the government provides a specific subsidy of $1 per ..
To be of value, a market segment must meet five criteria. Outline a talk focusing on examples of market segments that clearly fail to meet each of these criteria?
The value chain and strategic cost analysis. Sustainable Products raises trees, cuts the trees into logs, and processes the logs into paper. Sustainable Products sells the paper to a distributor, who then sells the paper to printers. Assume that a we..
Assume there is a central city school district in which the student population is predominantly black. What will there be a salary differential between black and white teachers.
As a result of several factors, aggregate demand decreased during the Great Depression. One factor would be:
label a level of population at which the population is expected to decline. Why is the population dexlining at this point?
The U.S. Internal Revenue Service (IRS) provides tax deductions for mortgage interest paid on both new and used homes by homeowners across the country. What incentive does this give to U.S. residents? What might happen to home values if the deduction..
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