Anchoring bias occurs when: 1. Individuals rely too heavily on the first piece of information encountered when making decisions. 2. Individuals ignore relevant information and focus solely on recent events. 3. Individuals are influenced by others’ behaviors and decisions. 4. Individuals consistently overestimate the likelihood of rare events occurring.

A positive externality arises when a person engages in an activity that has   an adverse effect on a bystander who is compensated by the person who causes the effect a beneficial effect on a bystander who pays the person who causes the effect a beneficial effect on a bystander who does not pay the person who causes the effect an adverse effect on a bystander who is not compensated by the person who causes the effect

A good is excludable if   the government can regulate its availability it is not a normal good people can be prevented from using it one person’s use of the good diminishes another person’s enjoyment of it

Table 14-3 The table represents a demand curve faced by a firm in a competitive market.     Quantity Total Revenue 0 $0 1 $13 2 $26 3 $39 4 $52   Refer to Table 14-3. For this firm, the price is $39. $26. $52. $13.

Income Tax rate $0 to $40,000 25% $40,000 to $100,000 40% Over $100,000 60%     Use the table above, how much income tax will you have to pay if you earned $50,000?   $14,000 $20,000   $25,000   $4,000

Tradable pollution permits   allow for companies that cannot reduce pollution easily to purchase  them from other companies that can are likely to create a higher level of total pollution are less desirable than corrective taxes in reducing pollution have prices that are set by the government  

Which of the following would be considered a private good?   a public beach fish in the ocean a swimming suit a ferry boat ride to an island with open seating

Some costs do not vary with the quantity of output produced. Those costs are called   1.  marginal costs.   2.  average costs.   3.  fixed costs.   4.  explicit costs.

Which of the following is true of markets characterized by positive externalities without a solution? Social value exceeds private value, and market quantity exceeds the socially optimal quantity Social value is less than private value, and market quantity exceeds the socially optimal quantity Social value seldom exceeds private value; therefore, social quantity is less than private quantity Social value exceeds private value, and market quantity is less than the socially optimal quantity

If education produces positive externalities, we would expect   the government to subsidize education people to realize the benefits, which would increase the demand for education colleges to relax admission requirement the government to tax education