1. All the following characterize sunk costs EXCEPT

a) It should not be a factor in decision-making

b) All the listed are characteristics of sunk costs

c) It may have already been spent

d) It is avoidable

2. What is bounded rationality?

a) People only make choices that gives non-negative utility

b) Human beings are often restricted/forced to make only rational decisions

c) Gathering all necessary information before making a decision

d) Limits on information, time, and abilities might prevent people from seeking out the best possible outcome

3. Firms in an oligopoly face a horizontal demand curve

a) True

b) False

4. Which of the following is most likely a "nudge" that behavioral economists would suggest?

a) A country-wide campaign (that promotes exercising)

b) Inviting a well-known speaker (to motivate employee loyalty)

c) A mandatory ethics class prior to joining the work force (to prevent fraudulent behavior)

d) A change in the layout of a retail store (to boost sales).