Researchers who make judgements in their experiments based on what is salient rather than on actual probabilities err by using a representativeness heuristic.
Indicate whether the statement is true or false
QUESTION 2The demand curve for a product slopes downward and to the right because:
a. total utility decreases as more of the product is consumed.
b. total utility derived from both, the product and its substitutes is the same.
c. marginal utility of the product diminishes as more of the product is consumed.
d. there are no substitutes for the product.
e. when the price falls, the income effect causes consumers to buy less of the product.
QUESTION 3What denotes the output level where economies of scale are exhausted and constant returns to scale begin?
a. minimum efficient scale
b. break-even point
c. efficient equilibrium
d. zero economic profit
QUESTION 4The face value of a bond is:
a. the amount of the coupon that is paid at equal intervals.
b. the amount repaid to the lender on maturity.
c. the percentage of company profits that is paid to the borrower.
d. equivalent to the capital gain.
e. equivalent to economic profit.
QUESTION 5Heuristics economize on the mental capabilities of people.
Indicate whether the statement is true or false
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