Exam 3: Utilities Indifference Curves

Research shows ________________ connection between the size of tips and the quality of service.

-Refer to Exhibit 3-4. Interpret the relationship between the two goods.

A server can increase a tip by the greatest amount by

Tipping violates the psychological assumption of

A microeconomic method that a student could use to decide how to study for final exams is

Stemming from convexity, as we move along an indifference curve, the marginal rate of substitution

-Refer to Exhibit 3-3. At Point (b) the slope of the indifference curve is equal to the slope of the

The rule that indifference curves cannot cross each other follows from

A set of indifference curves for a consumer is called a convex map.

-Refer to Exhibit 3-2. Which figure illustrates goods that are perfect complements?

What is the name of the axiom that states that, if bundle x is revealed to be preferred to bundle y (either directly or indirectly) and bundle y is different from x, then bundle y cannot be directly or indirectly revealed to be preferred to x?

The axiom that states that, if bundle x is revealed to be preferred to bundle y (either directly or indirectly) and bundle y is different from x, then bundle y cannot be directly or indirectly revealed to be preferred to x is called the Strong Axiom of Revealed Preference (SARP).

Assume an indifference map of convex indifference curve. What is the significance of the optimal consumption bundle being at a point where one indifference curve is tangent to the budget line?

If a consumer satisfies a version of the SARP, then the consumer will make the types of choices that would be made by a decision maker with convex preferences and a continuous, nonsatiated utility function.

The only theory of the economics of tipping considers just the customer's income, while ignoring the server's income.

What is the name of the axiom that states that, if bundle x is ever directly revealed to be preferred to bundle y when the two bundles are not identical, then y can never be directly revealed to be preferred to x?

Two goods are perfect substitutes if they have right-angle indifference curves.

Understanding tipping requires analysis of

Give the tip that, if left by all other customers, would provide the server with the income that you feel is best, considering your preferences and your income. This is known as the

-Refer to Exhibit 3-3. Which point is not within the economically feasible set?