Exam 10: Consumer Choice and Behavioral Economics

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

Table 10-1 Keegan has $30 to spend on Pita Wraps and Bubble Tea. The price of a Pita Wrap is $6 and the price of a glass of Bubble Tea is $3. Table 10-1 shows his total utility from different quantities of the two items. -Refer to Table 10-1.What is Keegan's optimal consumption bundle?

Marginal utility can be

The marginal utility per dollar that Harold Stratton receives from oranges is greater than the marginal utility per dollar Harold receives from pears.To maximize his utility,what should Harold do?

Total utility is maximized in the consumption of two goods by

Which of the following is a common mistake made by consumers?

The economic model of consumer behavior explains how consumers' tastes and preferences are formed.

A consumer's indifference curves can never cross.

Which of the following is held constant along an indifference curve?

During its run on Broadway,the play The Producers regularly sold out all available tickets at the St.James Theater.The theater could have raised ticket prices from $75 to $125 and still sold all available tickets but chose not to do so.The best explanation for this decision is

The only Giffen goods that have been identified so far in the real world are luxury goods.

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

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

Economists assume people's tastes are identical.

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.

The income effect due to a price decrease will result in an increase in the quantity demanded for

The ultimatum game and the dictator game are used in economic experiments to test whether fairness is an important influence on consumer decision-making.

The observation that people tend to value something more highly when they own it than when they don't is called the

Suppose Barry is maximizing his utility from consuming used paperback novels and audio books.The price of a used novel = $4 and the price of an audio book = $8.If the marginal utility of the last novel was 32 units of utility (utils)what was the marginal utility of the last audio book purchased?

Psychologists Daniel Kahneman and Amos Tversky conducted the following experiments by asking a sample of people the following questions: Scenario A: "Imagine that you have decided to see a play and paid the admission price of $10 per ticket.As you enter the theater you discover that you have lost the ticket.The seat was not marked and the ticket cannot be recovered.Would you pay $10 for another ticket?" Scenario B: "Imagine that you have decided to see a play where admission is $10 per ticket.As you enter the theater you discover that you have lost a $10 bill.Would you still pay $10 for a ticket for the play?" As long as additional tickets are available,there's no meaningful difference between losing $10 in cash before buying a ticket,and losing the $10 ticket after buying it.In both cases,you are out $10.Yet,far more subjects (88 percent)in Scenario B say they would pay $10 for another ticket and see the play while in Scenario A,only 46 percent of the subjects say they would be willing to spend another $10 to see the play. Which of the following is the best explanation for the results of the experiment?