Exam 10: Consumer Choice and Behavioral Economics

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?

Some economists have argued that path dependence and switching costs can lead to market failure.Which of the following is an example of this argument?

Suppose you pre-ordered a non-refundable movie ticket to Avengers: Infinity War.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?

Economists assume people's tastes are identical.

Traditionally, economists have considered culture, customs, and religion as

A consumer's utility-maximizing combination of goods is given by the bundle that corresponds to the point on

The substitution effect of a decrease in the price of movie tickets results in

The marginal utility per dollar that Harold Stratton receives from oranges is greater than the marginal utility per dollar Harold receives from pears.To maximize his utility, what should Harold do?

As a consumer consumes more and more of a product in a particular time period, eventually marginal utility

Firms that automatically enroll their employees in retirement plans, giving them the option to opt-out instead of to opt-in, is an example of a form of behavioral economics known as

Economists have used ________ and ________ in experiments designed to determine whether consumers care about fairness when they make decisions.

The iPod is a product without any significant network externalities.

Suppose Adam Einberg pays $100 for a ticket to a new Broadway play and $100 was the maximum price he was willing to pay.On the day of the performance of the play Adam refuses to sell the ticket for $150.How would behavioral economists explain Adam's refusal to sell his ticket?

The limitation that a consumer's total expenditure on goods and services purchased cannot exceed the income available is referred to as

Alan Krueger conducted a survey of fans at the 2001 Super Bowl who purchased tickets to the game for $325 or $400.Krueger found that (a)94 percent of those surveyed would not have paid $3,000 for their tickets, and (b)92 percent of those surveyed would not have sold their tickets for $3,000.These results are an example of

The income effect of a price increase for a Giffen good outweighs the substitution effect.

Figure 10-8 Manuri has $300 to spend on Pilates classes and Yoga classes. The price of a group Pilates class is $20 and the price of a group Yoga class is $10. Manuri's optimal bundle is given by "A" in Figure 10-8. -Refer to Figure 10-8.Suppose the price of Pilates sessions rise to $30 while income and the price of Yoga sessions remain unchanged.The substitution effect of this price change is represented by the movement from

Figure 10-3 Bettye Babylon does not charge admission to her arboreal estate, the Hanging Gardens. Due to space limitations, Bettye only allows 200 visitors per day at her estate. The figure represents the supply and demand for admission to the Hanging Gardens. -Refer to Figure 10-3.If Bettye chose to auction off tickets to her estate, bidding should cause the price of tickets to

Suppose Joe is maximizing total utility within his budget constraint.If the price of the last pair of jeans purchased is $25 and it yields 100 units of extra satisfaction and the price of the last shirt purchased is $20, then, using the rule of equal marginal utility per dollar spent, the extra satisfaction received from the last shirt must be

Figure 10-5 -Refer to Figure 10-5.What is the marginal rate of substitution for one bar of chocolate between h and j?