Under what circumstances would a consumer who has an anchoring bias still be likely to maximize her marginal utility?
a. if the anchor price is above the price the seller really wants
b. if the anchor price is the main reference the buyer uses in negotiating
c. if the anchor price is above the legitimate market price
d. if the anchor price equals the legitimate market price
d. if the anchor price equals the legitimate market price
You might also like to view...
A consumer has $1,000 a week to spend on renting square feet of housing x1 (at a price of $5 per square foot) and eating out meals x2 (at a price of $20 per meal). Derive the budget line equation and find the opportunity cost of housing in terms of meals in your equation.
What will be an ideal response?
In a market economy, a resource is compensated according to
a. the needs of its owner. b. its contribution to the final product. c. social priority. d. government direction.
If a country produces good Y (measured on the vertical axis) and good X (measured on the horizontal axis), then the absolute value of the slope of its production possibility frontier is equal to
A) the opportunity cost of good X. B) the price of good X divided by the price of good Y. C) the price of good Y divided by the price of good X. D) the opportunity cost of good Y. E) the cost of capital (assuming that good Y is capital intensive) divided by the cost of labor.
You probably know why firms advertise. But the incentives to advertise vary from market structure to market structure. In which market structure is there a weak, but still existent, reason to advertise?
a. monopoly b. oligopoly c. monopolistic competition d. perfect competition e. there is no weak incentive—they are always strong