Exam 10: Consumer Choice and Behavioral Economics

A study discussed in the Making the Connection feature in the text found that there is ________ that some consumers are not well aware of prices, even for goods they buy regularly.

All but one of the following have been suggested by some economists as possible consequences of path dependency and switching costs.Which of the following is not a possible consequence of path dependency and switching costs?

Which of the following is not a common mistake made by consumers?

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

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

What is an indifference curve?

Article Summary The use of celebrities to endorse products remains a popular way for many companies to attract customers and keep their products relevant to their customers. The article discusses five factors that must be examined by a company when choosing a celebrity to endorse its product: 1. The cost of a superstar versus the value of a rising star 2. Finding a good fit between the celebrity and the image of the brand 3. Choosing someone who will promote the brand 4. Identifying valid metrics to measure success 5. The future appeal of the celebrity Carefully chosen celebrity endorsements have proven to influence customers and enhance a brand's reputation, but as the list indicates, not all celebrities are the right fit for all products. Source: David Schwab, " Keeping Up With The Evolving World Of Celebrity Endorsement," Forbes, June 27, 2015. -Refer to the Article Summary above.Economists refer to an increase in sales due to celebrity endorsements as being the result of

Suppose the marginal utilities for the first three cans of soda are 100, 80 and 60, respectively.The total utility received from consuming 2 cans is

Figure 10-9 -Refer to Figure 10-9.If the consumer has $240 to spend on DVDs and CDs, what is the price of a DVD if the budget constraint is BC₁?

The income effect of a decrease in the price of macaroni and cheese (assume this is an inferior good)results in

If a consumer receives 22 units of marginal utility for consuming the first can of soda, 20 units from consuming the second, and 15 from the third, the total utility of consuming the three units is

All consumption bundles along a given indifference curve are equally desirable.

If marginal utility of apples is diminishing and is a positive amount, consuming one more apple will cause

Which of the following correctly describes the result of a price increase for an inferior good?

In the utility maximizing model, consumer preferences are assumed to be transitive.What does this mean?

A sunk cost is

What happens to the absolute value of the marginal rate of substitution as you move down a convex (bowed toward the origin)indifference curve?

What must be true in terms of the income effect, the substitution effect, and the type of good for the good's demand curve to be upward sloping?

If the marginal utility Ida Mae receives from eating chicken wings is negative then

The demand curve for corn is downward sloping.If the price of corn, an inferior good, falls, then