Microeconomics
10th Edition
ISBN: 9781259655500
Author: David C Colander
Publisher: McGraw-Hill Education
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Question
Chapter 21, Problem 8QE
(a)
To determine
Effect of choosing between the item and money.
(b)
To determine
Rationality of the endowment effect.
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Students have asked these similar questions
What does behavioral economics have to say about each of the following statements? a. “Nobody is truly charitable—they just give money to show off.” b. “America has a ruthless capitalist system. Considerations of fairness are totally ignored.” c. “Selfish people always get ahead. It’s like nobody even notices!”
What would behavioral economics say about each of the following statements?
a. “Nobody is truly charitable-people donate money just to show off."
b. “America has a ruthless capitalist system. Considerations of fairness are totally ignored."
c. “Selfish people always get ahead. It's like nobody even notices!"
what are some keypoints about behavioral economics?
Chapter 21 Solutions
Microeconomics
Ch. 21.1 - Prob. 1QCh. 21.1 - Prob. 2QCh. 21.1 - Prob. 3QCh. 21.1 - Prob. 4QCh. 21.1 - Prob. 5QCh. 21.1 - Prob. 6QCh. 21.1 - Prob. 7QCh. 21.1 - Prob. 8QCh. 21.1 - Prob. 9QCh. 21.1 - Prob. 10Q
Ch. 21 - Prob. 1QECh. 21 - Prob. 2QECh. 21 - Prob. 3QECh. 21 - Prob. 4QECh. 21 - Prob. 5QECh. 21 - Prob. 6QECh. 21 - Prob. 7QECh. 21 - Prob. 8QECh. 21 - Prob. 9QECh. 21 - Prob. 10QECh. 21 - Prob. 11QECh. 21 - Prob. 12QECh. 21 - Prob. 13QECh. 21 - Prob. 14QECh. 21 - Prob. 15QECh. 21 - Prob. 16QECh. 21 - Prob. 17QECh. 21 - Prob. 18QECh. 21 - Prob. 19QECh. 21 - Prob. 1QAPCh. 21 - Prob. 2QAPCh. 21 - Prob. 3QAPCh. 21 - Prob. 4QAPCh. 21 - Prob. 5QAPCh. 21 - Prob. 1IPCh. 21 - Prob. 2IPCh. 21 - Prob. 3IPCh. 21 - Prob. 4IPCh. 21 - Prob. 5IPCh. 21 - Prob. 6IP
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Similar questions
- In 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_forwardBehavioral economics incorporates insights from which other field of study? A. Psychology B. Political science C. Sociology D. Anthropologyarrow_forwardStyles 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.arrow_forward
- Explain behavioral economic beliefarrow_forwardUrgently needarrow_forwardWhen consumers were given the opportunity to select a package of ground beef labeled “75% lean” or a package of ground beef labeled “25% fat,” most consumers chose “75% lean.” Why? What concept from the chapter does this illustrate? The reason is that consumers are swayed by cheap talk. Cheap talk is the concept. The reason is that consumers are much more likely to choose the alternative framed as the positive option. This is called a framing effect. The reason is that consumers infer the value of a product from positive advertising. This is called inference induction. The reason is that consumers respond better to higher numbers. They feel they are getting more because 75 is greater than 25. The concept is the endowment effect.arrow_forward
- 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_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_forwardI need help with both questionsarrow_forward
- A student finds that his purchase of drawing pencils for art class is directly related to the amount of art paper he buys. According to behavioral economics, these art supplies would be classified as A. complements. B. independents. C. alternatives. D. substitutes.arrow_forwardParker's shares of stock in ACME Corporation lost $100 in value, but his shares in XYZ, İnc. gained $350. According to behavioral economics research, how would Parker feel as a result of these changes? Multiple Choice Parker would feel about the same. Parker would feel better off. Parker would feel worse off. Behavioral economics research suggest that the intensity of losses versus gains follows no measurable pattern.arrow_forwardam. 111.arrow_forward
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