Relative to a Situation in Which Gasoline Is Not Taxed,the

question 86

Multiple Choice

Relative to a situation in which gasoline is not taxed,the imposition of a tax on gasoline causes the quantity of gasoline demanded to

• A)decrease and the quantity of gasoline supplied to decrease.
• B)decrease and the quantity of gasoline supplied to increase.
• C)increase and the quantity of gasoline supplied to decrease.
• D)increase and the quantity of gasoline supplied to increase.

Recognize examples of common biases and errors in judgment and decision-making.

Understand the principles and outcomes of the ultimatum game in behavioral economics.

Explain the concept of asymmetric information and how it leads to problems like moral hazard and adverse selection.

Identify and describe systematic behavioral mistakes such as overconfidence, availability bias, and brand loyalty despite evidence.

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Definitions:

Investment Performance

An assessment of how an investment has done over a specific period, often compared to a benchmark or standard.

Financial Intermediaries

Institutions that act as middlemen between savers and borrowers, facilitating the flow of funds in the financial system.

Diversify Their Portfolios

The strategy of spreading investments among various financial instruments, industries, and other categories to minimize risk.

Credit Risk

The potential that a borrower will fail to meet their obligations in accordance with agreed terms.