Exam 6: Consumer Choice and Behavioural Economics

Table 6-7 Table 6-7 shows Antonio's utility from beer and pizza. -Refer to Table 6-7.What is Antonio's marginal utility from consuming the fifth beer?

Results of the ultimatum game indicate that most people value fairness enough that they will refuse to participate in a transaction they consider unfair,even if they are worse off financially as a result.

Table 6-2 Table 6-2 above shows Keira's utility from soup and sandwiches.The price of soup is $2 per cup and the price of a sandwich is $3.Keira has $18 to spend on these two goods. -Refer to Table 6-2.If Keira maximises her utility,how many units of each good should she buy?

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

During a study session for an economics exam with three other students,Peter Daltry commented on an example of a consumer who had to decide the on number of slices of pizza and cups of Coca-Cola he would consume.Peter explained that 'To maximise his utility,this consumer must equate the marginal utility per dollar for pizza and Coca-Cola.' Was Peter's analysis correct?

If you exhibit the endowment effect as a decision maker,then you are

If Valerie purchases ankle socks at $5 and gets 25 units of marginal utility from the last unit,and bandanas at $3 and gets 12 units of marginal utility from the last bandana purchased,she

Consider a good whose consumption takes place publicly.Your decision to buy that good depends

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

If total utility increases at a decreasing rate as a consumer consumes more coffee,then marginal utility must

Table 6-5 -Refer to Table 6-5,which lists the values of Harry Taber's marginal utility and marginal utility per dollar for burgers and sushi rolls.Assume that the price of the burgers is $4 and the price of sushi rolls is $2.When Harry's income is $14 he buys two burgers and three sushi rolls.The last column lists the values of the marginal utility per dollar for sushi rolls when the price of sushi rolls decreases to $1.Complete this statement: As a result of the change in price,

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 Microsoft Office increases as the number of other people who use Microsoft Office increases?

A Giffen good could be either a normal good or an inferior good.

An item has utility for a consumer if it

Which of the following is explained by the law of diminishing marginal utility?

Why might network externalities result in products that contain inferior technologies?

Economists have noted that businesses of a certain type tend to congregate geographically,attracting workers with skills in those fields.This,in turn,lures more firms seeking employees with those skills.Some examples include commercial banking,software development,and the automobile industry.What mechanism is at work here? Briefly explain how the mechanism works to the advantage of employers and employees.

Figure 6-2 Figure 6-2 represents the demand for ice cream cones. -Refer to Figure 6-2.When the price of ice cream cones increases from $2 to $3,quantity demanded decreases from 4 ice cream cones to 3 ice cream cones.This change in quantity demanded is due to

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