Exam 10: Consumer Choice and Behavioral Economics

In the ultimatum game,allocators usually offer recipients at least a 40 percent share of the money,and recipients almost always reject offers of less than a 10 percent share.Which of the following does not explain why allocators offer recipients a relatively generous share and why recipients reject meager offers?

Economists do not think it is possible to compare the relative utility that two people get from consuming an additional unit of a particular good.

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.If Jay can eat all the burgers he wants for free,how many burgers will he consume?

Consider the following factors: a.culture b.religion c.customs d.prices e.income Which of the factors above are likely to influence the choices consumers make?

The demand curve for canned peas is downward sloping.If the price of canned peas,an inferior good,rises

Figure 10-2 Figure 10-2 represents the demand for ice cream cones. -Refer to Figure 10-2.Which of the following statements is true?

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.What is Keira's marginal utility per dollar spent on the third cup of soup?

If Marlowe obtains 9 units of utility per dollar spent on apples and 6 units of utility per dollar spent on oranges,then Marlowe

Which of the following statements about utility and preferences is false?

Maurice Allais,Reinhard Selten and Vernon Smith all were awarded the Nobel Prize in Economics in part because

An economist observes two consumers in a supermarket.One of the consumers buys a case of Coca-Cola and the other buys a case of Pepsi-Cola.Both colas sell for the same price and the ages and incomes of the consumers are also the same.Based on this information,how would the economist explain the consumers' choices?

Describe the demand curve for a Giffen good.

Table 10-5 -Refer to Table 10-5,which lists the values of Harry Taber's marginal utility and marginal utility per dollar for Italian submarine (sub)sandwiches and tacos.Assume that the price of the sub sandwiches is $4 and the price of tacos is $2.When Harry's income is $14 he buys two Italian sub sandwiches and three tacos.The last column lists the values of the marginal utility per dollar for tacos when the price of tacos decreases to $1.Complete this statement: As a result of the change in price

Each price-quantity combination on a consumer's demand curve shows the utility-maximizing quantity at the given price.

You wish to buy only one CD.Use the rule of equal marginal utility per dollar to determine which one to purchase: (a)Usher's latest CD for $15 which gives you 75 units of utility,or (b)Tom Petty and the Heartbreakers' Greatest Hits for $10 that gives you 100 units of utility?

Lilly Davis has $5 per week to spend on any combination of ice cream and candy.The price of an ice cream cone is $2 and the price of a candy bar is $1.The table below shows Lilly'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 Lilly purchases 2 ice cream cones and 1 candy bar.Is she consuming the optimal consumption bundle? If so,explain why.If not,what combination should she buy and why?

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

Optimal decisions are made

A network externality refers to a situation in which the usefulness of a product decreases with the number of consumers who use it.

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.If Keegan can drink all the bubble tea he wants for free,how many glasses will he consume?