The Food and Drug Administration (FDA) Just Announced Yesterday That

question 1

Multiple Choice

The Food and Drug Administration (FDA) just announced yesterday that they would approve a new cancer-fighting drug from King.You observe that King had an abnormal return of 0% yesterday.This suggests that

• A)the market is not efficient.
• B)King stock will probably rise in value tomorrow.
• C)King stock will probably fall in value tomorrow.
• D)the approval was already anticipated by the market.

Grasp the assumptions underlying consumer choice theory, including completeness, transitivity, and nonsatiation.

Analyze how indifference curves represent consumer preferences and how their shape reflects underlying assumptions about marginal rates of substitution.

Understand the concept of a budget constraint and how it represents the trade-offs consumers face given their income and prices of goods.

Recognize the significance of behavioral economics in challenging traditional assumptions about consumer rationality.

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Definitions:

Executive Control Functions

Cognitive processes including planning, working memory, attention, problem solving, verbal reasoning, inhibition, mental flexibility, task switching, and initiation and monitoring of actions.

Practical Intelligence

A form of intelligence related to the ability to solve everyday problems by utilizing experience-based knowledge.

Gardner

Refers to Howard Gardner, a psychologist known for his theory of multiple intelligences, which suggests people have different kinds of intelligences.

Sternberg

Refers to Robert Sternberg, an American psychologist known for his theory on intelligence and creativity.