Microeconomics

Bounded rationality suggests that A) individuals might make “incorrec

Bounded rationality suggests that A) individuals might make “incorrect” decisions because they are unable to consider all possible options. B) individuals would rather have less choice to more choice. C) rational decisions can only be made when choices are restricted. D) individuals are happier when their choices are restricted or “bounded.”   ANSWER A  

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Date: September 9th, 2020

What is one reason a gift card might be less desirable than cash? A)

What is one reason a gift card might be less desirable than cash? A) A gift card requires an individual to purchase from a particular store, which restricts the choice set. B) Cash requires an individual to purchase from a particular country, which restricts the choice set. C) Cash and the gift card are equally […]

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Date: September 9th, 2020

If income increases due to a decrease in taxes, then A) utility will

If income increases due to a decrease in taxes, then A) utility will increase because consumers can afford a larger bundle of goods. B) utility will fall because consumers will be forced to buy a smaller bundle of goods. C) utility will remain constant. D) utility will increase because consumers will be forced to buy […]

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Date: September 9th, 2020

Data shows that United States college students purchase more e-books t

Data shows that United States college students purchase more e-books than German college students. Assuming that all students have identical preferences for e-books and textbooks, what is the likely explanation for this result? A) Taxes on textbooks are higher in the United States than taxes on textbooks in Germany. B) Taxes on textbooks are lower […]

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Date: September 9th, 2020