ECON BEHAV PRACTICE QUESTION

Consider the following indifference curves that compare boats and cars for Dr. Howard:
Keep in mind that U3 > U2 > U1. Which of the following statements is true?
Dr. Howard’s preferences are reflexive.
Dr. Howard exhibits diminishing marginal utility of consumption.
Boats provide no utility for Dr. Howard.
Dr. Howard’s marginal rate of substitution between cars and boats is constant.

Economists often represent preferences as a set of indifference curves that do not cross. When indifference curves cross, they represent preferences that violate which property?
complete
reflective
transitivity

Lucy has the following utility function:

U(B, T) = 6*T*B – 6B – 11T

Where B is reading a book chapter and T is watching a television show. It takes Lucy 1 hour to read a book chapter and ½ hour to watch a television show. If Lucy has 8 hours this weekend to either read or watch television, what is Lucy’s utility-maximizing bundle of book chapters and television shows?

In order for a preference relation to be considered rational, it must satisfy which of the following properties?
It must be transitive and complete.
It must be transitive and symmetric.
It must be complete, symmetric and transitive.

Candace is about to eat lunch. She currently faces the following menu:
{pizza; salad; pasta; waffles}
and has the following rational preference ordering:
waffles > pasta > pizza > salad
where “>” denotes strong preference. Suppose her menu expands to include two additional items: hamburger and a fruit salad. Which of the following preference relations would violate the Independence of Irrelevant Alternatives property?
salad > pizza
waffles > fruit salad
fruits salad > hamburger

Linda has worked on a project for her class, and believes it will receive a B if she turns it in. She also believes that working on the project for another hour will raise her project grade to a B+. Which of the following is an example of “honoring” sunk costs?
Linda is more likely to work for another hour on the project if she has already worked on it for 5 hours than if she has already worked on it for 20 hours.
Linda is more likely to work for another hour on the project if she has already worked on it for 20 hours than if she has already worked on it for 5 hours.
Linda is more likely to work for another hour on a project if it makes up a large portion of the final grade than if it makes up a small portion of the final grade.

Chipotle sells burritos. Burrito meat is given a “Quality Score” from 0-100, with 100 being highest quality. Chipotle currently offers two different types of burrito. The first costs $7.00 and uses meat with a Quality Score of 85. The second costs $4.00 and uses meat with a Quality Score of 55. Chipotle wants to offer a decoy burrito that is asymmetrically dominated by their less expensive burrito. Assuming that consumers prefer higher quality meat and lower prices, which of the following attribute sets is appropriate for the decoy?
An $8.00 burrito with a Quality Score of 70 A $6.50 burrito with a Quality Score of 30
A $6.00 burrito with a Quality Score of 65

Jared has a free hour. Below is a list of things Jared can do, as well as the utility he would get from doing them:

Walk his dog: U = 5
Pick a fight with his neighbor: U = 6
Take a nap: U = 10
Read an economics textbook: U = 4

The opportunity cost of walking his dog is ______; the opportunity cost of reading an economics textbook is ________; and the opportunity cost of taking a nap is _________.
10; 10; 10
10; 10; 5
10; 10; 6