Question 1

1. Roberto will pay more for the same steak in a restaurant with fancy tablecloths than in a restaurant without them.

2. Karen knows she should stop eating chocolate, but she eats more anyway.

3. Alesia opens a new hardware store despite market research indicating insufficient consumer demand for the store’s products.

4. Nelson employs a worker whose family desperately needs the income, even though the worker’s wage exceeds the revenue that worker brings into Nelson’s firm.

Question 2

What do experiments with the ultimatum game reveal about the typical participant?

Question 1

Which of your behaviors might be considered irrational? Do you consider sunk costs? Do emotions ever put you on an irrational path?

Question 2

How gullible are you? Do you tend to believe what you hear from your friends and what you read on the Internet? Have you ever learned that you were fooled by these or other information sources?

Question 3

Do you sometimes exhibit altruism? In what instances have you forgone money for the benefit of others?

Question 4

Would a product’s effects on the environment influence your decision to buy it? Can you name the greenhouse gases that cause global warming? What sorts of costs weigh against the benefits of obtaining this information?

Question 5

As a manager, would you set prices so that they ended in “99”? Why or why not? Does this approach ever work on you as a consumer?

Question 6

What evidence have you seen of the failure or success of neoclassical models? Have you noticed changes in the price or quality of goods as the number of competitors changed? Does the quantity of a good demanded decrease as its price increases?