Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 21, Problem 6E
To determine
Difference in behavior of guests in different situations.
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Rick thinks either Morty or Summer broke his TV. Morty and Summer each have to decide simultaneously whether to take the blame or blame the other person. If they both blame the same person (both blame Morty or both blame Summer), the person they blame gets a small punishment and utility of -2, while the blameless person gets a utility of 0. Otherwise (if they both blame the other or both blame themselves), they both get a more severe punishment and a utility of -10.
Suppose Mr. and Mrs. Ward agreed not to vote in tomorrow’s election. Would such an agreement improve utility? Would such an agreement be an equilibrium?
I am unsure the direction the utility functions would go in , with this specific scenario
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- Suppose a consumer has a budget of $200 to spend on two goods, X and Y, whose prices are $20 and $10, respectively. If the consumer is observed to buy 5 units of X and 10 units of Y, where the respective Marginal Utilities of X and Y are, 50 and 40 utils, is the consumer in equilibrium? Explain why or why not. If the consumer is not in equilibrium under conditions in d), suggest another combination that would possibly achieve equilibrium. Explain your answer.arrow_forwardA discussion about psychological law of consumption?arrow_forwardTrue/ false Describe Since a greater utility number indicates that a consumer is better off, utility numbers cannot be negative.arrow_forward
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