Exam 7: Consumer Choice and Elasticity

The income effect due to a price decrease will result in an increase in the quantity demanded for

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

At a price of $8 per dozen,Chuy sells 40 dozen homemade tamales per week.When he raised his price to $12 per dozen,he still sold 40 dozen per week.Based on this information,the demand for his tamales is

The demand curve for a Giffen good slopes upward.

Which of the following is not a determinant of a good's price elasticity of demand?

Opera Estate Girls' School is considering increasing its tuition to raise revenue.If the school believes that raising tuition will increase revenue it is assuming that the demand for attending the school is

When Nablom's Bakery raised the price of its breads by 10 percent,the quantity demanded fell by 15 percent.What was the effect on sales revenue?

If,when you consume another piece of candy,your marginal utility is zero,then

A budget constraint

Figure 7-4 -Refer to Figure 7-4.The demand curve on which elasticity changes at every point is given in

For each pair of items below determine which product would have the higher price elasticity of demand (in absolute value). A)Insulin for a diabetic or aspirin for someone suffering a headache. B)A new Whirlpool 27 cu.ft.side-by-side refrigerator or electricity to power your all-electric home. C)A can of Red Bull or soft drinks in general.

Consumers have to make tradeoffs in deciding what to consume because

If demand is inelastic,the absolute value of the price elasticity coefficient is greater than one.

For a demand curve to be upward sloping,the good would have to be an inferior good,and

If a consumer always buys goods rationally,then

Many people leave their servers tips in restaurants,even when they are not likely to visit the restaurant again.This is evidence that

A network externality refers to a situation in which the usefulness of a product decreases with the number of consumers who use it.

At a price of $20,Daphne sells 35 hand-painted dog collars per week.When she raised her price to $25,she sold 28 per week.Based on this information,the demand for her dog collars is

Each price-quantity combination on a consumer's demand curve shows the utility-maximizing quantity at the given price.

If by purchasing more apples and fewer oranges you increase your total utility,then apples must be cheaper than oranges.