Question

question 3 (2 points)
which of the following is a focus of behavioral economics?
a) understanding how to optimize utility under budget constraints.
b) understanding how cognitive biases influence decision - making.
c) understanding the mechanics of supply and demand.
question 4 (2 points)
in economics, what characterizes the long run?

Explanation:

Behavioral economics focuses on how cognitive biases (like loss aversion, overconfidence) influence decision - making. It combines insights from psychology and economics. Option a) is more related to traditional microeconomics (utility maximization under budget constraints). Option c) is related to general supply - demand analysis (a core concept in traditional economics). Only option b) directly addresses cognitive biases in decision - making, which is a key aspect of behavioral economics.

Answer:

B. Understanding how cognitive biases influence decision - making.