Exam 10: Consumer Choice and Behavioral Economics

Arnold Kim began blogging about Apple products during his fourth year of medical school.Kim's website,MacRumors.com,became so successful that he decided to give up his medical career and work full time on his website,despite the nearly $200,000 he had invested in his education.In making his decision,the $200,000 he spent on his education

Identify the one statement that does not demonstrate how social effects influence consumer choice.

Economists Gary Becker and Kevin Murphy are associated with which of the following?

If the price of muffins,a normal good you enjoy,rises

Article Summary The article describes three key ways startup companies can get the most benefit from celebrity endorsements. One way is choosing a celebrity that can bring credibility to the company and then incorporating the celebrity into the company's marketing strategy. Second, get public relations value from the celebrity by offering exclusive interviews, contests, and photos and videos of the celebrity with the product. Finally, make sure to choose a celebrity who will represent the product at all times, giving the product maximum exposure. Source: Kevin Tighe II, "3 Ways Startups Can Turn Celebrity Endorsements Into Big Gains," Forbes, March 8, 2013. -Refer to the Article Summary.Economists refer to an increase in sales due to celebrity endorsements as being the result of

A curve that shows combinations of consumption bundles that give a consumer the same utility is called

In an experiment that employed the dictator game,economists at Cornell University gave student "allocators" the option of dividing $20 in only two ways (a)$18 for themselves and $2 to another student,or (b)$10 for themselves and $10 to another student.What was one result from this experiment?

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.

Which of the following correctly describes the result of a price increase for an inferior good?

A consumer's utility-maximizing combination of goods is given by the bundle that corresponds to the highest point on his indifference curve.

One reason college students do not study enough to get high grades is that they are unrealistic about their future behavior.

What is the common feature displayed by the following items? a.eating in a newly opened "fusion" cuisine restaurant b.attending a Red Sox game in Fenway Park c.wearing Lucky Brand designer jeans

Marginal utility is the

Economists have noted that businesses of a certain type tend to congregate geographically,attracting workers with skills in those fields.This,in turn,lures more firms seeking employees with those skills.Some examples include commercial banking,software development,and the automobile industry.What mechanism is at work here? Briefly explain how the mechanism works to the advantage of employers and employees.

The word "util" has been used by economists in the past as an objective measure of utility.Today economists believe that

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

10.2 Where Demand Curves Come From Figure 10-1 -Refer to Figure 10-1.Which of the following statements is true?

Figure 10-5 -Refer to Figure 10-5.Suppose the price of pizza increases while the price of hamburger remains constant.Then,the consumer's

If a consumer receives 20 units of utility from consuming two candy bars,and 25 units of utility from consuming three candy bars,the marginal utility of the second candy bar is

Economists have shown that when the ultimatum game experiment is carried out,both allocators and recipients act as if fairness is important.