The study of decision making that assumes people are rational in a broad sense, even if they do not have complete and perfect information is called _____.
a. rational economics
b. reasonable economics
c. understandable economics
d. behavioral economics
e. optimal economics
QUESTION 2Assume Brad worked as a contractor for a year and had revenues of 120,000 and explicit cost of 70,000 . If he could have been paid 80,000 working for a computer company, his:
a. accounting profit equaled 10,000 and he would be rational to stop working as a contractor.
b. accounting profit equaled 50,000 and he would be rational to continue working as a contractor.
c. economic profit equaled 50,000 and he would be rational to continue working as a contractor.
d. economic profit equaled -30,000 and he would be rational to stop working as a contractor.
QUESTION 3Yield on a bond refers to:
a. the coupon-rate of the bond.
b. the money earned by selling a bond.
c. the return from a bond after its maturity.
d. the difference between the face value of a bond and the bond price.
e. the annual return until the bond matures.
QUESTION 4Assume that a cargo ship carrying the merchandise of a cloth merchant has been wrecked. Such a setback will be accounted as the merchant's:
a. sunk cost.
b. deadweight loss.
c. marginal cost.
d. opportunity cost.
QUESTION 5_____ is the understanding that perfect information is not likely to be available, and that as a result, people make decisions that in hindsight look irrational, but in reality are the rational results of a brain that is economizing.
a. Reasoning
b. Parametric determinism
c. Rational ignorance
d. Bounded rationality
e. Dynamic inconsistency
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