Exam 21: Consumer Choice: Maximizing Utility and Behavioral Economics

In order for an individual to achieve consumer equilibrium through the consumption of two goods,A and B,that individual must fulfill the condition

If the marginal utility of X is negative,then the last unit of X is

Marginal utility is defined as the

For economists,framing refers to the

The two white rats in the "buying" behavior study conducted at Texas A & M acted in a manner that supported the law of demand and the concept of consumer equilibrium.

We take one dollar from a pauper and give it to a millionaire.Assuming a diminishing marginal utility of money,

Which of the following statements is true?

Which of the following statements is true?

Suppose that in the year 2050,one gallon of water is more expensive than a one-carat diamond.What could explain this?

This is the solution to the diamond-water paradox: Those things that have high value in use sometimes have low prices because they are consumed at low __________ utility; those things that have low value in use sometimes have high prices because they are consumed at high __________utility.

The law of diminishing marginal utility helps to explain

Suppose Alice receives 250 utils from consuming one hamburger and 90 utils from consuming a second hamburger.What is the marginal utility of the second hamburger?

Which of the following is true?

Consumer equilibrium exists when an individual

Given the choice between a sure-thing option and a gamble option with the same expected payoff,a____________ person will choose gamble.

If a person's income and the prices of both goods all rise by the same percentage,then her budget constraint

Exhibit 21-5 -Refer to Exhibit 21-5. What value goes in blank (D)?

There are two goods,X and Y,and the absolute price of good Y falls.It follows that

Indifference curves are generally downward sloping and concave to the origin.

Exhibit 21-8 -Refer to Exhibit 21-8.If the price of good X rises,the budget constraint moves from budget constraint