The Better a Person Is at Producing One Good

question 188

Multiple Choice

The better a person is at producing one good:

• A) the worse he is at producing other goods.
• B) the higher the opportunity cost to him of producing other goods.
• C) the lower the incentive he has to trade with other people.
• D) the better he is at producing other goods.

---

Definitions:

Status Quo

The existing state of affairs; in prospect theory, the current situation from which gains and losses are calculated.

Utility

A measure of satisfaction or value that consumers receive from consuming goods and services.

Endowment Effect

The tendency people have to place higher valuations on items they possess (are endowed with) than on identical items that they do not possess; perhaps caused by loss aversion.

Behavioral Economists

Economists who study how psychological, social, cognitive, and emotional factors affect the economic decisions of individuals and institutions.