Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 3, Problem 9Q
To determine
Nature of optimization – Positive, Normative or both.
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Microeconomics (2nd Edition) (Pearson Series in Economics)
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- Two simplifying assumptions are used extensively in economics. What are they?arrow_forwardWhat is a major difference between adaptive and rationalexpectations? Give an example of each.arrow_forwardAccording to Richard Thaler, economics is the sum of two parts. One is Optimization. What is the other part?arrow_forward
- Is this example also an example of economically rational decision making? “In 2019, I started my small business by selling prints of my photographs. Now it’s temporarily closed. During this time I had the option of shipping my prints through USPS or UPS. I decided to ship my prints through USPS instead of UPS since it was a bit expensive at the time. My prints that were shipped out from USPS arrived in time and came in good condition. The opportunity cost is the cost of UPS shipping.”arrow_forwardWrite down the merits of deductive method of economics? 300 wordsarrow_forwarda) Trade-offs are important part of economic decision making. You are supposed to Analyze and explain any three trade-offs that you face in your life. b) You plan to study on weekend and your friends ask you to go to a farm house with them. What do you think is the true cost of spending your weekend on a farmhouse with friends? c) You plan to spend your weekend working at your father’s superstore for a wage, but your friends ask you go play cricket at the weekend. What do you think is the true cost of spending your weekend playing cricket with friends?arrow_forward
- How does the scarcity of resources affect the firm’s decision making? Justify your answer through discussing specific situations.arrow_forwardDifferentiate between an exogenous variable and an endogenous variable in an economic model? Why isn’t it useful to construct an economic model that contains only exogenous variables (and no endogenous variables)?arrow_forwardIn what ways do human decision making differ from rational conventional economic theoryarrow_forward
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