Exam 10: Consumer Choice and Behavioral Economics

Table 10-4 -Refer to Table 10-4.For steak and cheese and grilled chicken sandwiches,the table contains the values of the marginal utility (MU)and marginal utility per dollar (MU/P)for Mabel Jarvis.Mabel has $14 to spend on steak and cheese and grilled chicken sandwiches.Which of the following statements is true?

Harvey Miller owns a baseball that was hit for a home run by Ted Williams.Harvey,a long-time Boston Red Sox fan,recently refused to sell his baseball for $75,000 even though he would not have paid someone more than $10,000 for the baseball if he did not already own it.Harvey explained his decision not to sell the baseball by noting that: "Ted Williams was my hero.This baseball has a great deal of sentimental value for me." Which of the following can explain Harvey's behavior?

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

If a consumer always buys goods rationally,then

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

What is marginal utility and what is the law of diminishing marginal utility?

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

An increase in income results in an outward shift of an indifference curve.

Economists have used ________ and ________ in experiments designed to determine whether consumers care about fairness when they make decisions.

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

Carolyn spends her income on popular magazines and music CDs.If the price of a CD is four times the price of a magazine and if Carolyn is maximizing her utility,she buys

Table 10-4 -Refer to Table 10-4.For steak and cheese and grilled chicken sandwiches,the table contains the values of the marginal utility (MU)and marginal utility per dollar (MU/P)for Mabel Jarvis.Mabel has $14 to spend on steak and cheese and grilled chicken sandwiches.Which of the following statements is false?

Table 10-7 Table 10-7 shows Antonio's utility from beer and pizza. -Refer to Table 10-7.What is Antonio's marginal utility from consuming the fifth beer?

The restriction that a consumer's total expenditure on goods and services purchased cannot exceed the income available is referred to as

The demand curve for an inferior good can never be downward-sloping.

If Lisa spends her income on veggie burgers and pints of soy milk and the price of veggie burgers is three times the price of a pint of soy milk,then when Lisa maximizes her utility she will buy

A standard which came to the market first,such as the QWERTY letter layout in typewriters,can become entrenched (this layout is still used in computer keyboards today).What is this phenomenon called?

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

Health Clubs typically experience an increase in one-year memberships in January,but many new customers cancel their memberships before the end of the year.Which of the following is the best explanation for this behavior?

Arnie Ziffel has $20 per week to spend on any combination of pineapples and green tea.The price of a pineapple is $4 and the price of a bottle of green tea is $2.The table below shows Arnie's utility values.Use the table to answer the questions that follow the table. a.Complete the table by filling in the blank spaces. b.Suppose Arnold purchases 4 pineapples and 2 bottles of green tea.Is he consuming the optimal consumption bundle? If so,explain why.If not,what combination should he buy and why?