Rosa received a corgi pillow as a raffle prize; she would have been willing to pay $18 to buy it herself. Based on the endowment effect, we would expect Rosa to be willing to sell the pillow Multiple Choice O O under no circumstances whatsoever. for some amount less than $18. for the $18 she would have been willing to pay for the pillow. only if she is offered more than $18.

Rosa received a corgi pillow as a raffle prize; she would have been willing to pay $18 to buy it herself. Based on the endowment effect, we would expect Rosa to be willing to sell the pillow Multiple Choice O O under no circumstances whatsoever. for some amount less than $18. for the $18 she would have been willing to pay for the pillow. only if she is offered more than $18.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter2: Choice In A World Of Scarcity

Section: Chapter Questions

Problem 20CTQ: During the Second World War, Germanys factories were decimated. It also suffered many human...

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please only do: if you can teach explain each partc: what does it mean? can you show graphs: show WARP : If the consumer’s wealth is high enough that both bundles can buy with both prices then WARP violates If the consumer may not be spending all of her wealth, are her choices consistent withthe Weak Axiom of Revealed Preference (or is it impossible to determine)?: If the consumer’s wealth is high enough that both bundles are aordable atboth prices then WARP violates. why? Therefore, it is notpossible to know
a. A young connoisseur has $600 to spend to build a smallwine cellar. She enjoys two vintages in particular: a 2001French Bordeaux (wF) at $40 per bottle and a less expensive 2005 California varietal wine (wC) priced at $8. Ifher utility is U (wF, wC))=wF2/3 w C1/3 ,then how much of each wine should she purchase?b. When she arrived at the wine store, this young oenologistdiscovered that the price of the French Bordeaux hadfallen to $20 a bottle because of a decrease in the valueof the euro. If the price of the California wine remainsstable at $8 per bottle, how much of each wine shouldour friend purchase to maximize utility under thesealtered conditions?c. Explain why this wine fancier is better off in part (b)than in part (a). How would you put a monetary value onthis utility increase?
Suppose you would have to pay Alicia at least $150 to get her to part with a ticket she just bought to see her favorite band play next Friday. Loss aversion implies that if Alicia had not yet bought the ticket, she would: Multiple Choice no longer be interested in purchasing it. be willing to pay more than $150 for it. be willing to pay exactly $150 for it. be willing to pay less than $150 for it.
ASAP While we re applying decision rule lets say we come to the point that the Marginal utility per dollar for good A is 4U and for good B is 4U and the price of A is 4 dollar and B is 5 dollar and the our remaining budget is 4 dollar (let say we have 2 good ) then for that situation if we buy good A our total utility remain same ?PLEASE ANSWER JUST MY SCENİRO DONT GİVE GENERAL DEFİNİTİON
Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem 27 units of marginal utility from her second poem 24 units of marginal utility from her third poem, and so on, with marginal utility declining by three units for each additional poem. Praxilla gets six units of marginal utility for each of her next three cucumbers consumed, five units of marginal utility for each of her next three cucumbers consumed, four units of marginal utility for each of the following three cucumbers consumed, and so on, with marginal utility declining by one for every three cucumber consumed. A poem costs three bronze coins hut a cucumber costs only one bronze coin. Praxilla has 18 bronze coins. Sketch Praxillas budget set between poems and cucumbers, placing poems on the vertical axis and cucumbers on the horizontal axis. Start off with the choice of zero poems and 18 cucumbers, and calculate the changes in marginal utility of moving along the budget line to the next choice of one poem and 15 cucumbers. Using this step-by-step process based on marginal utility, create a table and identify Praxillas utilityâ€”maximizing choice. Compare the marginal utility of the two goods and the relative prices at the optimal choice to see if the expected relationship holds. Hint: Label the table columns: 1) Choice, 2} Marginal Gain from More Poems, 3) Marginal Loss from Fewer Cucumbers, 4) Overall Gain or Loss, 5) Is the previous choice Optimal? Label the table rows: 1) 0 Poems and 18 Cucumbers, 2) 1 Poem and 15 cucumbers, 3) 2 Poems and 12 cucumbers, 4) 3 Poems and 9 Cucumbers, 5) 4 Poems and 6 cucumbers 6) 5 Poems and 3 Cucumbers, 7) 6 Poems and 0 Cucumbers.
Explain why individuals make Choices that are directly on the budget constraint, rather than inside the budget constraint DI outside it.
question as image a. If she can visit only one of the stores, which one would she go and what would be her optimal bundle there? Could she afford this very bundle at the other store? (b) If she can freely visit both stores, (buying each commodity from the store where it is cheaper !!) what would be her optimal bundle? What would she buy from each store? (c) Back to (a), how much money would she willing to give up (out of her $720 budget) for the ability to visit both stores rather than only one store? (HINT: After giving up that money, she is left with less money with which optimizing utility with the option of visiting both stores -buying each commodity from the cheaper store- she is able to achieve the same level of utility in the scenario with the original uncut budget but having to choose only one of the stores to shop at)
True/False/Uncertain: 1. In taking an exam, Atack, a rational student, allocates his time to the various questions so as to equalize hismarginal point utility per minute on all questions. 2. The marginal utility of food to Zecher depends only on the amount of food (and not on the amount ofhousing) and the marginal utility declines as more food is consumed; likewise for housing. Therefore,both food and housing are normal goods. (Hint: Express the optimality condition for Zecher’s [UMP], MUF/MUH = PF/PH. Notice that PF/PH is fixed. If all of an increase in income is spent on F, can the equality be maintained?)
ASAP DECİSİON RULE FOR UTİLİTY MAXİMİZATİON As I understand we choose the good which has higher marginal utility per dollar . BUT MY QUESTİON İs that What if our budget is not end up and the marginal utility per dollar is same for both good What should we do at that point? PLEASE ANSWER MY QUESTİON DONT GİVE CLLASİC DEFİNİTİON
Pls help with below homework. Assume that the consumers A and B want to maximize utility, that they consume the same goods price ration. What decision rule would they employ, and how would this relate to the Welfare Frontier? (Assume that the goods are X and Y).
Suppose that each week Fiona buys 16 peaches and 4 apples at her local farmer's market. Both kinds of fruit cost $1 each. From this we can infer that: If Fiona is maximizing her utility, then her marginal utility from the 16th peach she buys must be greater than her marginal utility from the 4th apple she buys. Fiona is not maximizing her utility. If Fiona is maximizing her utility, then her marginal utility from the 16th peach she buys must be equal to her marginal utility from the 4th apple she buys. The law of diminishing marginal utility does not hold for Fiona.
Roxanne is considering chipping in to pay for some tree trimming in her neighborhood. If the trees are trimmed, everyone's view improves by the same amount. Roxanne's utility function is given by u(x,t)=3x+1200t, where x is the amount of money she has to spend and t is a variable that equals 1 if the trees are trimmed and 0 if they are not. 1st attempt See Hint Suppose Roxanne starts with $8000. Her utility of that amount of money without the trees being trimmed is 24000 (that is, u(8000,0)=24000). Calculate her reservation price for contributing to the tree-trimming project. $