In an essay format please answer the following two questions:
2. How does the analysis of risk aversion change when one allows for alternative models of decision-making than expected utility?
3. How does subjective expected utility theory differ from expected utility theory? How might one elicit a subjective probability from a decision-maker? What is the difference between risk, uncertainty and ambiguity?
In an essay format please answer the following two questions:
2. How does the analysis of risk aversion change when one allows for alternative models of decision-making than expected utility?
3. How does subjective expected utility theory differ from expected utility theory? How might one elicit a subjective probability from a decision-maker? What is the difference between risk, uncertainty and ambiguity?
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Michael spends all of his income on coffee and donuts. A coffee costs $2.50 and a donut costs $2.00. At his current consumption level, the marginal utility for coffee is 30 utils, and the marginal utility for a donut is 60 utils. Which statement best describes what Michael needs to do to maximize his utility?
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Question 2
What is it called when the marginal utility derived from the last dollar spent on each good is the same across all goods and the last dollar spent uses all of the available budget for the purchase of those goods?
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Question 3 (1 point)
What does the economic theory of marginal utility infer?
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Question 4
Kate is addicted to chocolate and does not care how much it costs. In fact, she spends more than $20 a week on chocolate. What can be concluded about elasticity in her buying decisions?
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Question 5 (1 point)
Why does the demand for a good become relatively more elastic?
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Question 6 (1 point)
Assume the price of chicken per pound is $3.49 and that Americans purchase 10 million pounds per chicken every month. If the price of chicken increases to $5.49 per pound, identify what will occur to consumer surplus?
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Question 7 (1 point)
What is another name for the difference between the price that consumers are willing to pay for a good and a lower price that they may actually have to pay?
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Question 8
Adam, Brian, Robert, and Sam all want to attend a football game. The admission price is $48. Adam is willing to pay $59 for the ticket. Brian is willing to pay $39. Robert is willing to pay $45, and Sam is willing to pay $55. Based on this information, who will go to the game?
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Question 9 (1 point)
Lily is willing to pay $10 for one bracelet and $5 for a second. Patty is willing to pay $12 for one bracelet and $2 for a second. If the price is currently $8 per bracelet, identify what is the total consumer surplus after Lily and Patty make their purchases?
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Question 10 (1 point)
Manfred is willing to shovel one driveway for $25, a second for $30, and a third for $35. Assume that the market rate for shoveling driveways is $32. How many driveways will Manfred shovel, what will be his total revenue, and what will be his producer surplus?
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Question 11 (1 point)
What would the difference between the price that producers receive and the lower price at which they are willing to sell the good be called?
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Question 12 (1 point)
What will happen when there is an increase in the price of eBook downloads?
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Question 13 (1 point)
When is price elasticity of demand utilized to measure how an individual changes the quantity they demand?
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Question 14 (1 point)
Assume Mary consumes only tea and pastries. A cup of tea costs 5 euros and a pastry costs 8 euros. Her weekly income is 450 euros. Mary always drinks 2 cups of tea for every pastry she consumes. What is MaryΓ’ΒΒs optimal weekly consumption bundle?
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Question 15 (1 point)
When is producer surplus a positive value?
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Question 1
Which of the following approaches to understanding and predicting consumer behavior depends primarily on the knowledge and experience of a firm's employees and its suppliers?
Test marketing and price experiments | ||
Analysis of historical data. | ||
Direct consumer surveys. | ||
Expert opinion. |
Question 2
In which of the following situations would reliance on expert opinion as a basis for a managerial decision be most preferred?
When the product being marketed is relatively new. | ||
When the level of economic activity can have a significant effect on the demand for the firm's output. | ||
When the product can be packaged with a variety of price and quality combinations. | ||
When the business in question serves as a supplier of inputs to other businesses, especially in multi-product situations where other strategies may be prohibitively expensive. |
Question 3
The approach to analyzing consumer behavior that asks consumers to rank and choose among different product attributes to reveal their relative valuation of different characteristics is called:
conjoint analysis. | ||
contingent valuation. | ||
the hedonic estimation technique. | ||
a direct consumer survey. |
Question 4
All of the following are limitations of direct consumer surveys except:
the possibility of response biases because survey respondents may not want to reveal their true preferences. | ||
the possibility that the type of questions asked may unintentionally bias the respondent's answers. | ||
the likelihood that respondents will deliberately and systematically mislead interviewers. | ||
the possibility that consumers' responses may not reflect their actual behavior in the market place. |
Question 5
Which of the following approaches to understanding and predicting consumer behavior does not actually solicit any information from potential customers?
Expert opinion. | ||
Test marketing. | ||
Analysis of historical data. | ||
Conjoint analysis. |
Question 6
Data collected on a sample of individuals with different characteristics at a specific point in time are called:
panel data. | ||
cross-section data. | ||
time series data. | ||
none of the above. |
Question 7
Which of the following approaches to understanding and predicting consumer behavior provides the most insight into how consumers can be expected to respond in an actual market setting?
Test marketing. | ||
Conjoint analysis. | ||
Expert opinion. | ||
Analysis of historical data. |
Question 8
An approach to analyzing consumer behavior in which consumer reaction to different prices is analyzed in a laboratory situation or a test market is called:
non-price experiments. | ||
focus groups. | ||
price experiments. | ||
none of the above. |
Question 9
Data collected on the same observation unit at a number of points in time are called:
panel data. | ||
time series data. | ||
cross-section data. | ||
none of the above. |
Question 10
A measure of how much the coefficient would vary in regressions based on different samples is called:
F-statistic. | ||
standard error of the estimated coefficient. | ||
t-statistic. | ||
partial F-statistic. |
Question 11
The test statistic used to test the hypothesis of whether a regression coefficient is significantly different from zero, holding all other independent variables constant, is called a(n):
t-test. | ||
F-test. | ||
multicollinearity test. | ||
autocorrelation test. |
Question 12
Regression analysis that analyzes the relationship between one dependent variable and several independent variables is called:
cluster analysis. | ||
correlation analysis. | ||
multiple regression analysis. | ||
simple regression analysis. |
Question 13
The ratio of the regression coefficient to its standard error is called:
F-statistic. | ||
t-statistic. | ||
coefficient of determination. | ||
partial F-statistic. |
Question 14
The coefficient of determination will range between what values?
-1 and +1 | ||
0 and 1 | ||
-3 and +3 | ||
none of the above |
Question 15
The range of values in which we can be confident that the true regression coefficient lies within a given degree of probability is called a:
confidence interval. | ||
logistic regression. | ||
prediction interval. | ||
none of the above. |
Question 16
The estimated regression equation is Y = 10 + 2.5X, if X =0 than the predicted value of Y is equal to
2.5 | ||
7.5 | ||
12.5 | ||
10 |