Reference no: EM133313955
True-False Questions
1. Marginal product is increasing as the firm uses more and more of a factor of production.
2. Poor choices arising from decision biases prove that rational, analytic thinking is always superior to intuition.
3. Well-behaved isoquants are convex and downward sloping.
4. Narrow bracketing leads to a better choice than broad bracketing since there are less alternatives to consider.
5. Too many options in a choice situation can lead to no choice at all.
6. On a perfectly competitive market, Pareto efficiency will be accomplished.
7. The law of small numbers means that people are more likely to be mistaken if they cannot repeat the same decision many times.
8. According to behavioral economics, people have unlimited mental resources to make rational choices, but they still have decision biases because of ignorance.
9. The fact that many smokers are not fully willing to accept the risks of smoking might be also explained by choice-supportive bias.
10. Monotonic transformation of a utility function still represents the same set of preferences.
11. Economies of scale mainly arise because of spreading fixed costs across more units produced.
12. Elasticity does not change along a linear demand curve.