Rational inattention refers to ________. A) the risk a firm ...

[Chloeellawright]

Rational inattention refers to ________.
 
  A) the risk a firm runs when they do not pay attention to their customers
  B) firms making infrequent price decisions because of the time and effort those decision require
  C) the cost to the firm of losing sales from alienating customers
  D) all of the above
  E) none of the above

Question 2

Proportional income taxation is distorting because
 
  A) people do all they can to avoid paying taxes.
  B) the competitive equilibrium is not Pareto optimal.
  C) firms do all they can to avoid paying taxes.
  D) the government budget constraint does not hold.

[k2629]

Answer to Question 1

B

Answer to Question 2

B