Exam 7: Consumer Choice and Elasticity

All but one of the following people were awarded a Nobel prize for their contributions to experimental economics and their explorations of the influence fairness has on consumer decision-making.Which person did not receive a Nobel Prize for this work?

Which of the following does not explain why consumers buy products that many other consumers are already buying?

When demand is elastic,a fall in price causes total revenue to rise because

During its run on Broadway,the play The Producers regularly sold out all available tickets at the St.James Theater.The theater could have raised ticket prices from $75 to $125 and still sold all available tickets but chose not to do so.The best explanation for this decision is

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

Along a downward-sloping linear demand curve

If the price elasticity of demand for insulin is equal to zero then the demand curve for insulin is

If the demand for cell phone service is inelastic,then

Suppose that at a price of $55,100 units were sold while at a price of $33,153 units were sold.Without calculating the price elasticity value,can you determine whether demand is elastic,unit elastic,or inelastic? Explain your answer.

The average price of gasoline in your neighborhood is $2.15 per gallon.Your neighbor,Diana tells you that you can "save a lot" by frequenting a gas station 20 miles outside your neighborhood where the price of gasoline is $2.06 per gallon However,she cautions you that there are usually long lines at that station.Is her suggestion beneficial to you?

You wish to buy only one CD.Use the rule of equal marginal utility per dollar to determine which one to purchase: (a)Drake's latest CD for $15 which gives you 75 units of utility,or (b)Bob Dylan's "Shadows in the Night" for $10 that gives you 100 units of utility?

If your total satisfaction increases when you consume another unit,your marginal utility must be

If demand is perfectly inelastic,the absolute value of the price elasticity of demand is

If the percentage change in the quantity of teapots demanded is greater than the percentage change in the price of teapots,then

Figure 7-3 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 7-3.The economically efficient price to charge for admission to the Hanging Gardens is

When demand is unit elastic,a change in price causes total revenue to stay the same because

If demand is perfectly elastic,the absolute value of the price elasticity coefficient is

Once a product becomes established,network externalities may create ________ costs that make consumers reluctant to buy a new product with better technology.

Studies on consumer behavior have found that most people value fairness enough that they will refuse to participate in transactions they consider unfair,even if they are worse off as a result.How does this affect a firm's decision to raise prices in the event of a temporary increase in demand?

Explain the endowment effect.