Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 1, Problem 5MC
To determine
The assumption of rational-actor paradigm.
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What does behavioral economics have to say about each of the following statements? a. “Nobody is truly charitable—they just give money to show off.” b. “America has a ruthless capitalist system. Considerations of fairness are totally ignored.” c. “Selfish people always get ahead. It’s like nobody even notices!”
Behavioral economics
a.
integrates psychological insights into economic models.
b.
relies on the assumption that homo economicus describes economic decision-making.
c.
assumes that economic agents have full information about the conditions surrounding their decisions.
d.
All of the above are correct.
Economics helps managers understand goal-oriented decision making.
Chapter 1 Solutions
Managerial Economics: A Problem Solving Approach
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Similar questions
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- Which scenario illustrates initiative as a motivator for behavior change? José notices that he doesn’t feel well when he drinks milk, so he eliminates milk from his diet. Alan’s girlfriend will buy him a new shirt if he stops using chewing tobacco. Gretchen thinks about how happy her doctor will be when he hears that she has been exercising regularly. Mike decides to take boxing lessons so that he can defend himself from bullies.arrow_forwardIf behavior is governed by rational self interest why do people make charitable contributions of time and moneyarrow_forwardDoes the decision you choose turned out to be effective?how?arrow_forward
- A personal economic decision that was driven by a behavioral bias rather than by pure rational behavior.arrow_forwardSelect the correct answer. Which form of relativism states that people rely on their own standards of right and wrong when making a decision? A. naïve relativism B. role relativism C. social relativism D. cultural relativism E. habitual relativismarrow_forwardCould you please write your own words, not copy-paste or plagiarism issues Question: Discuss the differences between social and market norms(behavioral economics) and what happens when these norms collide. How can an understanding of these two norms help businesses?arrow_forward
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