Exam 9: Decision Making by Individuals and Firms

Joshua is tired of school as well as his part-time job and decides on the spur of the moment to take a weekend trip to Cabo San Lucas.He pays for it with his credit card,rather than with money from his checking account.Which type of irrational behaviour does this BEST represent?

After 3 years at an expensive university,Pierre realizes that he doesn't want to finish school but really wants to be a chef.When Pierre suggests that he leave university for culinary school,his parents insist that he stay for one more year to get his degree.Which statement is TRUE?

The purpose of behavioural economics is to determine why:

Use the following to answer questions : Scenario: Betty's Cookie Shop Betty runs a cookie shop where she sells cookies for $1 each.She employs five people,each of whom worked a total of 500 hours last year;she paid them $10 per hour.Her costs of equipment and raw materials add up to $75 000.Her business ability is legendary,and other companies have offered to pay Betty $100 000 to come to work for them.She also knows she could sell her cookie shop for $150 000.The bank in town pays an annual interest rate of 3% on all funds deposited with it. -If the marginal cost curve is upward-sloping,as output increases,marginal costs will:

The decision to tip a server is a(n):

Jacquelyn is a student at a major university.Which factor is NOT an explicit cost of her attending university?

Economic profits are calculated by:

Most economic models:

Use the following to answer questions : Table: TC's Pizza Parlor Slices of Pizza Total Costs Total Benefits 0 \ 10 \ 0 5 20 40 10 30 55 15 40 65 20 50 70 -(Table: TC's Pizza Parlour)Use Table: TC's Pizza Parlour.What is the optimal level of production?

A person who is oversensitive to loss and is unwilling to recognize the loss and move on has:

Use the following to answer questions : -(Figure: The Marginal Benefit Curve)Use Figure: The Marginal Benefit Curve.The total benefit of mowing six lawns is approximately:

Use the following to answer question 123: Table: The Cost of Producing Gadgets Quantity of Gadgets Produced Total Cost 0 \ 100 1 \ 105 2 \ 110 3 \ 115 4 \ 120 5 \ 125 -(Table: The Cost of Producing Gadgets)Use Table: The Cost of Producing Gadgets.According to this table,the marginal cost is:

Which question BEST describes a "how much" decision?

Use the following to answer questions : Scenario: Betty's Cookie Shop Betty runs a cookie shop where she sells cookies for $1 each.She employs five people,each of whom worked a total of 500 hours last year;she paid them $10 per hour.Her costs of equipment and raw materials add up to $75 000.Her business ability is legendary,and other companies have offered to pay Betty $100 000 to come to work for them.She also knows she could sell her cookie shop for $150 000.The bank in town pays an annual interest rate of 3% on all funds deposited with it. -(Scenario: Betty's Cookie Shop)Use Scenario: Betty's Cookie Shop.Given the information provided,Betty's implicit costs are:

Suppose that Joan buys a new refrigerator to replace her old one that suddenly quit working.If Joan buys the model on closeout sale and doesn't take time to do research on repair records and energy efficiency of various other models,she is using:

If the marginal benefit received from consuming a good is greater than the marginal cost of production:

A rational economic decision:

Until recently,Rosemarie worked as an accountant,earning $30 000 annually.Then,she inherited a piece of commercial real estate that had been renting for $12 000 annually.Rosemarie decided to leave her job and operate a Peruvian restaurant in the space she inherited.At the end of the first year,her books showed total revenues of $260 000 and total costs of $230 000 for food,utilities,cooks,and other supplies.Her economic profit at the end of 1 year is:

Firms will continue to produce if:

The tendency to avoid making a decision is: