Econ Macro (book Only)
6th Edition
ISBN: 9781337408745
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 1, Problem 5P
To determine
If the informed decisions can prove to be costly while making a good decision or to have an uninformed decision in order to save cost.
Concept Introduction:
Rational decision makers need to make an informed decision as they are dependent on theresources from which they would be able to acquire information which can eventually benefit in terms of gaining the additional information which would include exceeding the additional costs.
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Chapter 1 Solutions
Econ Macro (book Only)
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- Purposeful behavior means that: people are selfish in their decision-making. people weigh costs and benefits to make decisions. people are immune from emotions affecting their decisions. decision-makers do not make mistakes when weighing costs and benefits.arrow_forwardWhich of the following about emotional influence on decision making is true? People generally make rational decisions that maximize desirable outcomes in the absence of emotions Only emotions that are relevant to the decision at hand have any influence on that decision People tend to overestimate their predicted negative emotions resulting from a decision's outcomes People are equally angry about unfair offers in the ultimatum game from computers and from other human playersarrow_forwardWhat type of bias relies too heavily on one piece of information in making a final decision? A. Availability Heuristic Bias B. Bandwagon Effect C. Anchoring Biasarrow_forward
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- Would you say that a sacrifice represents the cost of a particular decision?arrow_forwardWhich of the following are examples of common behavioral errors in decision making (multiple correct answers; check all that apply). A. Always paying more than true willingness to pay. B. Letting unrecoverable sunk costs influence ongoing decisions for when such costs have no bearing on benefits and costs going forward. C. Making different decisions when an identical problem is framed in two different ways, especially when one is framed in terms of gains and the other in terms of losses. D. Always saving too little. E. Generally spending too little on high-quality, high-priced items. F. Settling on a default alternative in the face of a difficult or complex decision G. Considering the average cost and average benefit, instead of the marginal cost and marginal benefit, When choosing whether a little more or less should be bought or produced.arrow_forwardWe learned that we can use choice between a gamble over someone's best and worst outcomes and getting an outcome of interest (like getting pizza) for certain as a way to assign numeric values to utility (on a scale of 0 to 1). Using this method, if you are indifferent between the following: A gamble that has a 0.3 chance of your best possible outcome (and no lower chance), and a 0.7 chance of your worst possible outcome. Getting pizza for certain. it means that your utility for getting pizza is:arrow_forward
- Give explanation to all options....arrow_forwardDescribe three ways in which human decision making differs from the rational individual conventional economic theory.arrow_forwardplease answer in detail with steps so that I can understand please explain why the option is correct and remaining incorrectarrow_forward
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