Podcast
Questions and Answers
What can be inferred when a consumer chooses a more expensive market basket over a cheaper one?
What can be inferred when a consumer chooses a more expensive market basket over a cheaper one?
- The consumer is maximizing their utility
- The consumer prefers the chosen market basket (correct)
- The consumer has a higher income
- The consumer is minimizing their costs
In a revealed preference scenario, what is the implication of choosing a market basket over another?
In a revealed preference scenario, what is the implication of choosing a market basket over another?
- The consumer is indifferent between the two market baskets
- The chosen market basket is preferred to the alternative (correct)
- The consumer is not maximizing their utility
- The chosen market basket is the cheapest option
If a consumer chooses market basket A over market basket B, and then chooses market basket B over market basket D, what can be inferred about market basket A?
If a consumer chooses market basket A over market basket B, and then chooses market basket B over market basket D, what can be inferred about market basket A?
- A is preferred to D
- A is preferred to all market baskets in the green-shaded area (correct)
- A is not preferred to any market baskets
- A is not preferred to B
What is the purpose of budget lines in revealed preference analysis?
What is the purpose of budget lines in revealed preference analysis?
What is the implication of a corner solution in a college trust fund scenario?
What is the implication of a corner solution in a college trust fund scenario?
If a consumer facing budget line l1 chooses market basket A, and a consumer facing budget line l2 chooses market basket B, what can be inferred about market basket A?
If a consumer facing budget line l1 chooses market basket A, and a consumer facing budget line l2 chooses market basket B, what can be inferred about market basket A?
What is the assumption of transitivity in consumer preferences?
What is the assumption of transitivity in consumer preferences?
What is the implication of the assumption that 'more is better than less' in consumer preferences?
What is the implication of the assumption that 'more is better than less' in consumer preferences?
What is an indifference curve?
What is an indifference curve?
According to the figure, which basket is clearly preferred to basket A?
According to the figure, which basket is clearly preferred to basket A?
What is the role of additional information in comparing market baskets?
What is the role of additional information in comparing market baskets?
What is the implication of the assumption that goods are desirable?
What is the implication of the assumption that goods are desirable?
What concept refers to the idea that consumers can compare and rank all possible market baskets?
What concept refers to the idea that consumers can compare and rank all possible market baskets?
In consumer behavior theory, what does it mean for a consumer to be 'indifferent' between two market baskets?
In consumer behavior theory, what does it mean for a consumer to be 'indifferent' between two market baskets?
What is the key assumption about preferences when considering the theory of consumer behavior?
What is the key assumption about preferences when considering the theory of consumer behavior?
What principle states that consumers can easily compare any two market baskets?
What principle states that consumers can easily compare any two market baskets?
Ignoring costs, it is noted that a consumer might prefer steak to hamburger but buy hamburger due to what reason?
Ignoring costs, it is noted that a consumer might prefer steak to hamburger but buy hamburger due to what reason?
Which of the following is true regarding completeness of preferences in consumer theory?
Which of the following is true regarding completeness of preferences in consumer theory?
Flashcards are hidden until you start studying
