Pearson eText Microeconomics -- Access Card
7th Edition
ISBN: 9780136850045
Author: Hubbard, Glenn, O'Brien, Anthony
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 10.4.16PA
Subpart (a):
To determine
How to apply the concept of behavioral economics.
Subpart (b):
To determine
How to apply the concept of behavioral economics.
Subpart (c):
To determine
How to apply the concept of behavioral economics.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
What is agent theory?
Styles
In an auction, potential buyers compete for a good by submitting bids. Adam Gallinsky, a social scientist from
NWU, compared eBay auctions in which the same good was sold. He found on average that, the higher the
number of bidders the higher the sales price. For example, in two separate auctions of identical IPods, the one
with the higher number of bidders brought the higher sales price. According to Gallinsky, this explains why
smart sellers set absurdly low opening prices (the lowest price the seller will accept), such as 1 cent for a new
IPod. Use the concept of consumer and producer surplus to explain this reasoning.
"The use of non-linear pricing schemes means that consumer behaviour will definitely break the law of demand". Using standard economic consumer choice theory, discuss this statement.
Chapter 10 Solutions
Pearson eText Microeconomics -- Access Card
Ch. 10.A - Prob. 1RQCh. 10.A - Prob. 2RQCh. 10.A - Prob. 3RQCh. 10.A - Prob. 4PACh. 10.A - Prob. 5PACh. 10.A - Prob. 6PACh. 10.A - Prob. 7PACh. 10.A - Prob. 8PACh. 10.A - Prob. 9PACh. 10.A - Prob. 10PA
Ch. 10.A - Prob. 11PACh. 10.A - Prob. 12PACh. 10 - Prob. 10.1.1RQCh. 10 - Prob. 10.1.2RQCh. 10 - Prob. 10.1.3RQCh. 10 - Prob. 10.1.4RQCh. 10 - Prob. 10.1.5PACh. 10 - Prob. 10.1.6PACh. 10 - Prob. 10.1.7PACh. 10 - Prob. 10.1.8PACh. 10 - Prob. 10.1.9PACh. 10 - Prob. 10.1.10PACh. 10 - Prob. 10.1.11PACh. 10 - Prob. 10.1.12PACh. 10 - Prob. 10.2.1RQCh. 10 - Prob. 10.2.2RQCh. 10 - Prob. 10.2.3RQCh. 10 - Prob. 10.2.4PACh. 10 - Prob. 10.2.5PACh. 10 - Prob. 10.2.6PACh. 10 - Prob. 10.2.7PACh. 10 - Prob. 10.2.8PACh. 10 - Prob. 10.2.9PACh. 10 - Prob. 10.2.10PACh. 10 - Prob. 10.2.11PACh. 10 - Prob. 10.3.1RQCh. 10 - Prob. 10.3.2RQCh. 10 - Prob. 10.3.3RQCh. 10 - Prob. 10.3.4PACh. 10 - Prob. 10.3.5PACh. 10 - Prob. 10.3.6PACh. 10 - Prob. 10.3.7PACh. 10 - Prob. 10.3.8PACh. 10 - Prob. 10.3.9PACh. 10 - Prob. 10.4.1RQCh. 10 - Prob. 10.4.2RQCh. 10 - Prob. 10.4.3RQCh. 10 - Prob. 10.4.4RQCh. 10 - Prob. 10.4.5PACh. 10 - Prob. 10.4.6PACh. 10 - Prob. 10.4.7PACh. 10 - Prob. 10.4.8PACh. 10 - Prob. 10.4.9PACh. 10 - Prob. 10.4.10PACh. 10 - Prob. 10.4.11PACh. 10 - Prob. 10.4.12PACh. 10 - Prob. 10.4.13PACh. 10 - Prob. 10.4.14PACh. 10 - Prob. 10.4.15PACh. 10 - Prob. 10.4.16PACh. 10 - Prob. 10.1CTECh. 10 - Prob. 10.2CTECh. 10 - Prob. 10.3CTE
Knowledge Booster
Similar questions
- 38. On January 7, Scott sends a letter to Aaron offering to sell his Xbox video game system for $50. On January 10, Aaron mails a letter of acceptance. On January 11, prior to receiving Aaron's letter, Scott faxes a letter to Aaron revoking his offer to sell his Xbox. As to the letters sent by Scott and Aaron: Aaron's letter is merely a counter-offer and Scott has the power to revoke. b. a. Scott's revocation is valid, no contract exists. Aaron's acceptance is effective upon dispatch and a valid contract exists. no contract because this contract must be in writing. C. "Parrow_forwardCan marginal utility be negative? Briefly explain with an examplearrow_forwardWhat is the purpose of the two fields of study neuroeconomics and behavioral economics?why might people tend to be overconfident?arrow_forward
- The rules of politics are not always the same as the rules of economics. In discussions about setting budgets for government agencies, there is a strategy called “closing the Washington Monument.” When an agency faces the unwelcome prospect of a budget cut, it may decide to close a high-visibility attraction enjoyed by many people (like the Washington Monument). Explain in terms of diminishing marginal utility why the Washington Monument strategy is so misleading. Hint: If you are really trying to make the best of a budget cut, should you cut the items in your budget with the highest marginal utility or the lowest marginal utility? Does the Washington Monument strategy cut the items with the highest marginal utility or the lowest marginal utility?arrow_forwardIn Behavioral Economics, what does it mean to say that people like to “play with the house’s money”? What is wrong with that phrase?arrow_forwardExplain behavioral economic beliefarrow_forward
- Anon is a graduate student at Lock Haven University studying human behavior. Three subjects, Felicity, Terrance, and Lola, listed their utility for pineapple and watermelon. Anon believes he will be able to tell which subject likes pineapple the most by referring to the levels of utility each one reported. His adviser, Dr. Util, tells him his research is flawed. Explain why Dr. Util feels this way.arrow_forwardWhat is cardinal utility theory?arrow_forward2. If the ratio of marginal utility to price for steak is 2.67 and if the patron increases the consumption of steak, how does the ratio of marginal utility to price tend to change? How and why does it change the way it does? Briefly explain your answer below and make sure to address both parts of the ratio. Don't just focus on the math but also incorporate the idea of consumption.arrow_forward
- The horizontally oriented definition of DEMAND states that "demand is the quantitites of a good that buyers are willing and able to buy at various prices in a given time interval." Which of the following statements are TRUE? If I really like a good, it does not matter how much I am able to afford to spend on it. The demand for a good is a specific amount. Demand is a behavioral relationship expressing what quantities buyers would want and be able to buy at various prices. If I can't afford to buy a product at today's available prices, I do not have a demand. The demand is all the possible price quantity combinations Demand depends on the availability of supply. Demand is a relationship between price as a variable and quantity demanded as a variable. Demand is a flow and requires a time interval be be fully understood.arrow_forwardAn economics professor finds that he strictly prefers a $10 bottle of wine over an $8 bottle, and a $12 bottle over a $10 bottle, and so on, but an $8 bottle over a $200 bottle. Explain why this makes him irrational according to a behavioral economics theory.arrow_forwardThe following graph shows the demand curve for a group of consumers in the U.S. market (blue line) for tablets. The market price of a tablet is shown by the black horizontal line at $80. Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Larry, green (triangle symbols) for Megan, purple (diamond symbols) for Raphael, tan (dash symbols) for Susan, and blue (circle symbols) for Alex. Use the rectangles to shade the areas representing consumer surplus for each person who is willing and able to purchase a tablet at a market price of $80. (Note: If a person will not purchase a tablet at the market price, indicate this by leaving his or her rectangle in its original position on the palette.)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning