Exam 10: Consumer Choice and Behavioral Economics

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?

Table 10-2 Table 10-2 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 10-2.Holding prices constant,when Keira's income changed from $18 to $23,what happens to her total utility and to the marginal utilities of the last cup of soup and the last sandwich purchased?

The substitution effect of a change in the price of cauliflower is the portion of the change in the quantity of cauliflower demanded that can be attributed to the change in the price of a substitute vegetable such as asparagus.

Grace Makutsi finally bought a pair of blue shoes that she had been coveting for a long time.In less than a week she discovered that the shoes were uncomfortable.Grace went back to wearing her old pair and stashed away the new pair.When asked by her boss,Mme.Ramotswe why does she not simply give away the new pair,she said: "But I paid so much for them." Grace's behavior

If you received negative marginal utility from consuming the 4th slice of pizza,then your total utility from 4 slices of pizza must be less than your total utility from 3 slices of pizza.

The law of diminishing marginal utility states that

A change in the price of a good has two effects on the quantity consumed.What are these effects?

The order of the letters along the rows of computer keyboards could be changed to allow users to type faster,but this would inconvenience the vast majority of people who learned to type with the current keyboard layout.The costs of switching to a new layout make this change unlikely.This is an example of

When the price of audio books,a normal good,falls,causing your purchasing power to rise,you buy more of them due to

The demand curve for a luxury good is upward-sloping.

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

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?

Table 10-6 Table 10-6 lists Jay's marginal utilities for burgers and Pepsi. Jay has $7 to spend on these two goods. The price of a burger is $2 and the price of a can of Pepsi is $1. -Refer to Table 10-6.What is Jay's optimal consumption bundle?

What does the marginal rate of substitution measure?

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

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

Which of the following statements describes economists' attitudes regarding the influence of social factors on the choices consumers make?

A sunk cost is a cost that has already been paid and cannot be recovered.

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?

All of the following products are most likely to have significant network externalities except