Exam 7: Consumer Choice and Elasticity

Economists have shown that when the ultimatum game experiment is carried out,both allocators and recipients act as if fairness is important.

Health Clubs typically experience an increase in one-year memberships in January,but many new customers cancel their memberships before the end of the year.Which of the following is the best explanation for this behavior?

Suppose at the current price,the demand for copper is estimated at -3.14.What happens to sales revenue if the government imposes a price ceiling below the free market equilibrium price in the copper market?

Necessities tend to have more inelastic demands than luxuries.

We can derive the market demand curve for gold earrings

One reason college students do not study enough to get high grades is that they are unrealistic about their future behavior.

Economist Jerry Hausman estimated the price elasticity of demand for "Post Raisin Bran" and "All types of breakfast cereals." He found that the price elasticity of demand for Post Raisin Bran was -2.5 and the price elasticity of demand for "All types of breakfast cereals" was -0.9.Which of the following can be implied from Hausman's estimates?

If a consumer receives 20 units of utility from consuming two candy bars,and 25 units of utility from consuming three candy bars,the marginal utility of the second candy bar is

Which of the following statements is true?

Jamal,Lawson and Kyle have been standing in line for almost an hour waiting to be served at Kirala,a popular new Japanese restaurant.It is possible that some of the people in line won't be served at all before the restaurant closes.Which of the following could explain why the restaurant does not simply raise prices high enough to eliminate the lines? a.In situations where consumption takes place publicly,demand for the product is also influenced by how many other people are buying the product.Consequently,a popular restaurant that increased its prices enough to eliminate lines might find that it had also eliminated its popularity. b.Firms may sometimes not raise their prices for fear that it violates people's sense of fairness and might alienate customers. c.The demand for restaurant meals is relatively elastic and if the firm raise prices it will lower its profits.

Which of the following is used to explain why a consumer's willingness to buy a cell phone increases as the number of other people who own and use cell phones increases?

List three reasons why demand for a product will often increase if the product is endorsed by a celebrity.

If the demand for a life-saving drug was perfectly inelastic and the price doubled,the quantity demanded would

We should never assume that an inelastic demand curve is a perfectly inelastic demand curve because

Suppose you pre-ordered a non-refundable movie ticket to X-Men: Days of Future Past.On the day of the movie you decide that you would rather not go to the movie.According to economists,what is the rational thing to do?

A good is path dependent when

Suppose Renee can increase her total utility from consuming video rentals and books by buying one more book and renting one fewer video.Which of the following is true?

In making decisions about what to consume,a person's goal is to

In general,a "big ticket item" such as a house or new car will

Which of the following is used to explain why a consumer's willingness to buy Microsoft Office increases as the number of other people who use Microsoft Office increases?