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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.
Cookie Monster consumes Ores (good 2, price p2) and homemade chocolate chip cookies that he buys from his mom (good 1, price p1). His utility function is u(x1, x2)=ln(x1+x2)+x1. A backstory for these preferences might be that he cares about total cal..
which in this case is lagged second difference. Note that it remains below zero after stock market crash of 1987. You can also do same thing for or variables. Are they fairly consistently away from zero. If so, can you design a rule to make money.
Which of the following is not a valid point in debating the merits of increasing government expenditures or cutting taxes during a recession?
Suppose you are offered the alternative of receiving either $3000 at the end of five years or P dollars today. There is no question that the $3,000 will be paid in full (no risk). Because you have no current need for the money, you would deposit the ..
Starting from a long run equilibrium, trace the effects for both a competitive firm and the market of a permanent reduction in market demand for: Consider two consumers, John and Maria, each with an quantity of two goods: corn and sug
Why are standards important for competition in the European market? Discuss examples (like telecommunication)! New members want to join the EU: Please name economic arguments to discuss if a further enlargement makes sense.
What is the purpose of the term sheet and why is it important? Be sure to write a detailed long essay to this question. Think about who the term sheet is written for, why it is written, and what does it need to convey.
According to 2009 data on the U.S. population which of the following was correct? Adults had higher labor-force participation rates and higher rates of unemployment compared to teenagers. Adults had higher labor-force participation rates and lower ra..
A teacher needs to grade 200 exams. She claims that exams require an average of 12 minutes to grade with a standard deviation of 3 minutes. A random sample of 36 exams is selected. Suppose the sample mean is 11 minutes. What is the probability that t..
Total cost is a function of output Q. TC = f (Q). The average total cost function can be found by dividing the total cost function by Q. What does the first derivative (dATC/dQ) of the ATC function show?
Assume new suppliers enter the market due to the increase in demand so the new supply curve is Q= -500 + 10P. Illustrate what are the new equilibrium price and equilibrium quantity.
Describe how a developing/emerging economy can benefit from trade with a wealthy country even if it has no absolute advantages. How can they benefit from trade with a poor country?
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