Jamil's friend dies of a sudden heart attack. Jamil rushes to his doctor for an expensive physical examination. This response demonstrates that ?
Correct answer: A. People give too much weight to a small number of vivid observations
- A. People give too much weight to a small number of vivid observations
- B. People easily change their minds when confronted with new information
- C. People enjoy going to the doctor
- D. People tend to plan ahead and follow through on their plans
Explanation
Jamil's sudden concern after his friend's death illustrates the availability or salience bias: a vivid recent event receives excessive weight in decision-making. It does not show that he generally plans ahead.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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