Exam 6: Concumer Choice and Behavioural Economics

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.

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

A good is path dependent when

-Refer to Figure 6-1. Which of the following statements is true?

The income effect results in consumers increasing the quantity of normal goods demanded when the price falls.

As a consumer consumes more and more of a product in a particular time period, eventually marginal utility

A consumer's utility-maximising combination of goods is given by the bundle that corresponds to the point on

-Refer to Figure 6-7. The change in the budget constraint from BC₁ to BC₂ implies

If Dawson prefers pizza to hamburgers and hamburgers to hot dogs, and if preferences are transitive,

To maximise utility, consumers should buy goods and services to the point where the marginal utility of each item consumed is equal.

The French Bakery ran a special which decreased the price of its croissants from $1.50 to $1.00. Although her money income had not changed, Toni decided to buy 2 croissants instead of her usual 1 bagel and 1 croissant. Toni's actions are explained by which of the following?

Most people would prefer to drive a luxury car that has all the options, but more people buy less expensive cars even though they could afford the luxury car because

Which of the following is used to explain why a consumer's willingness to buy a mobile increases as the number of other people who own and use mobiles increases?

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

The additional utility that George receives from consuming one more slice of pizza is called

Suppose Renee can increase her total utility from consuming video rentals and books by buying one more book and renting one fewer video. Which of the following is true?

The demand curve for a Giffen good is

-Refer to Table 6-2. Suppose Keira's income increases from $18 to $23 but prices have not changed. What is her utility maximising bundle now?

Avner is maximising total utility by buying sports magazines and protein supplements. For him to buy more sports magazines,

For which of the following products is social influence likely to have the greatest impact?