Question : 21) Economists have used ________ and ________ in experiments designed : 1245189

 

 

21) Economists have used ________ and ________ in experiments designed to determine whether consumers care about fairness when they make decisions.

A) Giffen goods; luxury goods

B) the income effect; the substitution effect

C) the ultimatum game; the dictator game

D) network externalities; the endowment effect

 

22) Traditionally, economists have considered culture, customs, and religion as

A) very important influences on the choices consumers make.

B) relatively unimportant factors in explaining the choices consumers make.

C) important influences in explaining consumer choices in command economies but less important in market economies.

D) subject to normative economic analysis rather than positive economic analysis.

 

23) Which of the following statements describes economists’ attitudes regarding the influence of social factors on the choices consumers make?

A) Economists formerly believed they were very important but now they believe they are not important.

B) Economists believe social factors affect consumer choice in markets for public goods but not in markets for private goods.

C) Liberal economists believe social factors are very important; conservative economists do not believe social factors have any influence on consumers.

D) Economists traditionally believed they were unimportant, but many economists now believe social factors are important.

 

24) Economists Gary Becker and Kevin Murphy are associated with which of the following?

A) the discovery of the first example of a Giffen good

B) They have argued that social factors are not important in explaining the choices consumers make.

C) Consumers appear to receive utility from consuming goods they believe are popular.

D) They discovered that price changes have both income and substitution effects.

 

Article Summary

The article describes three key ways startup companies can get the most benefit from celebrity endorsements. One way is choosing a celebrity that can bring credibility to the company and then incorporating the celebrity into the company’s marketing strategy. Second, get public relations value from the celebrity by offering exclusive interviews, contests, and photos and videos of the celebrity with the product. Finally, make sure to choose a celebrity who will represent the product at all times, giving the product maximum exposure.

Source: Kevin Tighe II, “3 Ways Startups Can Turn Celebrity Endorsements Into Big Gains,” Forbes, March 8, 2013.

 

25) Refer to the Article Summary. Economists refer to an increase in sales due to celebrity endorsements as being the result of

A) network externalities.

B) the endowment effect.

C) social influence.

D) the ultimatum game.

26) Refer to the Article Summary. One explanation for the increase in product sales because of celebrity endorsements is that people seem to receive ________ from goods they believe are popular.

A) more utility

B) diminishing utility

C) greater network externalities

D) increased path dependency

 

27) Which of the following refers to the increase in the usefulness of a product as the number of consumers who use it increases?

A) positive externalities

B) network externalities

C) external marginal utility

D) the impact of celebrity endorsements

 

28) Which of the following is used to explain why a consumer’s willingness to buy a cell phone increases as the number of other people who own and use cell phones increases?

A) network externalities

B) market failure

C) diminishing marginal utility

D) the income effect of a price change

 

29) The order of the letters along the rows of computer keyboards could be changed to allow users to type faster, but this would inconvenience the vast majority of people who learned to type with the current keyboard layout. The costs of switching to a new layout make this change unlikely. This is an example of

A) path dependency.

B) how social influences overwhelm the substitution effect of a price change.

C) how the elasticity of demand for typewriters has been affected by externalities.

D) how consumers sometimes do not behave rationally.

 

30) An advantage of Microsoft windows is its compatibility with the widest range of hardware and software. The dominance of Windows is self-reinforcing: hardware and software manufacturers ensure that their products are compatible with Windows in order to have access to the large number of Windows users. Which principle best describes this scenario?

A) endowment effects

B) endorsement effects

C) economies of scale

D) network externalities

 

 

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