Microeconomic Foundations - Bachelor of Economics
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Questions and Answers

In microeconomics, how are individuals' preferences described?

  • As a random assortment of choices
  • As a fixed set of choices without any ranking
  • As a ranking system from most desired to least desired choices (correct)
  • As a single choice that remains constant

    • What does the principle of rationality in economics assume about individuals' actions?

  • Individuals act without any consideration for their preferences
  • Individuals act to maximize others' satisfaction
  • Individuals act randomly without considering their preferences
  • Individuals act in ways that best satisfy their preferences (correct)

    • What is the central focus of traditional microeconomic analysis?

  • How individuals can make decisions without considering scarcity
  • How individuals face incentives to make decisions under conditions of scarcity (correct)
  • How individuals can have unlimited resources to make decisions
  • How societies can distribute resources equally

    • According to microeconomics, what does the principle of rationality suggest about people's choices?

    <p>People will choose the option that maximizes their satisfaction or utility</p> Signup and view all the answers

    What are the preferences in microeconomics not limited to?

    <p>Tangible or quantifiable items</p> Signup and view all the answers

    What does traditional microeconomic analysis assume about the world?

    <p>It assumes a world of finite resources</p> Signup and view all the answers

    In the field of competition law, what foundational premise does economic analysis traditionally operate under?

    <p>The assumption that individuals behave rationally</p> Signup and view all the answers

    What does the concept of welfare focus on?

    <p>What people subjectively prefer</p> Signup and view all the answers

    What is the Kaldor-Hicks criterion used for?

    <p>To convert individual preferences into monetary values for comparison</p> Signup and view all the answers

    What does economic welfare increase when an individual moves from?

    <p>A less preferred state to a more preferred one</p> Signup and view all the answers

    How does behavioral economics explore deviations from the traditional rational model?

    <p>By understanding when and how people's decisions diverge from the traditional rational model</p> Signup and view all the answers

    What does the assumption of rationality in economic actors introduce, according to the text?

    <p>More nuanced and complex layers to our understanding of market dynamics</p> Signup and view all the answers

    What does the Kaldor-Hicks criterion aim to address?

    <p>The problem of interpersonal comparability in assessing overall societal welfare</p> Signup and view all the answers

    According to the text, what do individuals in the field of competition law aim to maximize through their decisions?

    <p>Their economic benefits</p> Signup and view all the answers

    What does the text suggest about the integration of insights from behavioral economics into competition law?

    <p>It challenges the notion of inherent rationality in economic actors</p> Signup and view all the answers

    What does economic welfare increase when an individual moves from?

    <p>A less preferred state to a more preferred one</p> Signup and view all the answers

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