Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Question
Chapter 19, Problem 4QE
To determine
The psychological assumptions of the theory of individual choice.
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What is choice on economic
In economics, we assume that choices are based on desired outcomes. This concept is
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The law of diminishing marginal utility is consistent with the fact that people trade. Do you agree or disagree? Explain your answer.
Chapter 19 Solutions
Microeconomics
Ch. 19.1 - Prob. 1QCh. 19.1 - Prob. 2QCh. 19.1 - Prob. 3QCh. 19.1 - Prob. 4QCh. 19.1 - Prob. 5QCh. 19.1 - Prob. 6QCh. 19.1 - Prob. 7QCh. 19.1 - Prob. 8QCh. 19.1 - Prob. 9QCh. 19.1 - Prob. 10Q
Ch. 19.A - Prob. 1QECh. 19.A - Prob. 2QECh. 19.A - Prob. 3QECh. 19.A - Prob. 4QECh. 19 - Prob. 1QECh. 19 - Prob. 2QECh. 19 - Prob. 3QECh. 19 - Prob. 4QECh. 19 - Prob. 5QECh. 19 - Prob. 6QECh. 19 - Prob. 7QECh. 19 - Prob. 8QECh. 19 - Prob. 9QECh. 19 - Prob. 10QECh. 19 - Prob. 11QECh. 19 - Prob. 12QECh. 19 - Prob. 13QECh. 19 - Prob. 14QECh. 19 - Prob. 15QECh. 19 - Prob. 16QECh. 19 - Prob. 1QAPCh. 19 - Prob. 2QAPCh. 19 - Prob. 3QAPCh. 19 - Prob. 4QAPCh. 19 - Prob. 5QAPCh. 19 - Prob. 1IPCh. 19 - Prob. 2IPCh. 19 - Prob. 3IPCh. 19 - Prob. 4IPCh. 19 - Prob. 5IPCh. 19 - Prob. 6IPCh. 19 - Prob. 7IPCh. 19 - Prob. 8IPCh. 19 - Prob. 9IPCh. 19 - Prob. 10IP
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Similar questions
- Do you think the model of consumer equilibrium describes how people really make the decisions on what to order to in a restaurant to maximize their utility? Is there a better model to measure consumer choice?arrow_forwardwhy is the idea that value depends on consumers preferences radical?arrow_forwardExamples of form utility?arrow_forward
- Joab and his friends used to play a game where they put on a dog's electric fence collar and tried to stand over the electric fence line because, after careful consideration of the costs and benefits, they decided that the benefits of watching their friends get shocked outweighed the costs of being shocked themselves. According to the economic way of thinking, by playing this game, Joab and his friends were O not responding to the incentives they faced. making an irrational choice. making a rational choice. not fully considering the costs and benefits of their decision since this is obviously a mistake for anybody to do.arrow_forwardDiscuss the impact of rational self-interest on each of the following decisions: a. Whether to attend college full time or enter the workforce full time. b. Whether to buy a new textbook or a used one. c. Whether to attend a local college or out of town college.arrow_forwardThe Law of Diminishing Marginal Utility is just a theory that has no application to everyday life. None of us behaves as if we were subject to this law. True or False? Explain.arrow_forward
- According to Kahneman and Tversky, what is the major problem they find with the basic tenets of utility theory?arrow_forwardCharles is training for a triathlon, a timed race that combines swimming, biking, and running. Consider the following sentence: Because his pool sessions are helping him swim more quickly, Charles plans to reduce by 1 hour per week the time he spends training on the bike and increase by 1 hour the time he spends in the swimming pool; however, his wife says that he should stop doing any biking and running and spend all 20 hours per week in the pool. Which basic principle of individual choice does Charles's plan illustrate that his wife's advice does not? Resources are scarce. All costs are opportunity costs. Many decisions are made on the margin. People usually exploit opportunities to make themselves better off.arrow_forwardBriefly discuss four disadvantages of using Cost-benefit analysis to measure utility.arrow_forward
- WHAT is an allocation of resources such that no person can be made better off without making another person worse off?arrow_forwardQ. 4 Economists suggest that common people consciously equate marginal utility with price as they are shopping for groceries, but I don't think anyone else but economists may do this and I suspect even they slip up. It is ridiculous to describe consumer behavior in terms of a theory that consumers have never even heard of. Humans are not super calculators. Many times people buy things on a whim. For example, I buy chewing gum at the checkout counter and it is not on my original list of items to purchase. Discuss Is the Homo Economicus assumption, that is, humans have the super-cognitive ability, are super-rational, and possess full information of all relevant costs, tradeoffs, budget available, and consequences, a reasonable assumption, or is there some other psychological model of consumer behavior that seem s more reasonable and explain observed human behavior well.arrow_forwardWhen a person demands something (in economics) they must be , and to buyarrow_forward
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