10/20 notes

Question 1

LOOK AT NOTES

Answer 1

ok

Question 2

three aspects of behavioralists

Answer 2

1)opportunity costs
2)Sunk costs
3) unrealistic about future tendencies

Question 3

behavioral economics

Answer 3

the study or psychology as it relates to the economic decision making of individuals and institutions

Question 4

what is opportunity costs

Answer 4

the potential forgone profit from a missed opportunity (what you give up)

Question 5

sunk costs

Answer 5

money that has already been spent and cannot be recovered, ‘Spend money to make money” is reflected by sunk costs. Sunk costs are excluded from future costs that a business may face

Question 6

what does it mean to be unrealistic about future behavior

Answer 6

Consumers selectively (but unwittingly) test the hypothesis that they will behave ideally. Too optimistic.

Question 7

according to behavior economists what do consumers fail to ignore

Answer 7

sunk costs