Log in
Economics
1
answer
0
watching
47
views

Share an example from your own life of a time when you faced a preference tradeoff and a cost (budget) tradeoff in order to make a decision. If one of the options had become significantly cheaper, how would it have altered your decision? What if you had had a significant increase in income?

Watch
1
answer
0
watching
47
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Joshua Stredder
Joshua StredderLv10
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

Let's talk about two trade-offs we face every day: how we spend our time and money. We can only do two things with income: spend it or save it. Time is the ultimate resource. We can choose to spend time working to earn an income or we can do other things, broadly classified as leisure.

Reply to these prompts to start your discussion:

How does a change in interest rate affect your decision to spend or save? How would a change in the interest rate affect a firm's decision to invest or save? How might an increase in the wage rate affect what you do with your time? Now describe a tradeoff you have made in terms of time or income.

Non-rational decisions are generally the result of either Satisficing or Intuition. Think about a time when you made a non-profit rational decision on the job or in your personal life. Was it the result of Satisficing or inttion? How would your decision have been different using the four steps for raional decision making? How would the steps have helped you to make a better or more sould, decision?

You plan on buying a used car. You have $12,000, and you are not eligible for any loans. The prices of available cars on the lot are given as follows:
Make, model, and year Price
Toyota Corolla 2002 $9,350
Toyota Camry 2001 $10,500
Buick LeSabre 2001 $8,825
Honda Civic 2000 $9,215
Subaru Impreza 2000 $9,690
For any given year, you prefer a Camry to an Impreza, an Impreza to a Corolla, a Corolla to a Civic, and a Civic to a LeSabre. For any given year, you are willing to pay up to $999 to move from any given car to the next preferred one. For example, if the price of a Corolla is $z, then you are willing to buy it rather than a Civic if the Civic costs more than $(z - 999), but you would prefer to buy the Civic if it costs less than this amount. Similarly, you
prefer the Civic at $z to a Corolla that costs more than $(z + 1000), but you prefer the Corolla if it costs less. For any given car, you are willing to move to a model a year older if it is cheaper by at least $500. For example, if the price of a 2003 Civic is $z, then you are willing to buy it rather than a 2002 Civic if the 2002 Civic costs more than $(z - 500), but you would prefer to buy the 2002 Civic if it costs less than this amount.
a. What is your set of possible alternatives?
b. What is your preference relation between the alternatives in (a) above?
c. Draw a decision tree and assign payoffs to the terminal nodes associated with the possible alternatives. What would you choose?
d. Can you draw a decision tree with different payoffs that represents the
same problem?

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in