If the thought of finishing an expensive meal even if the appetite is full is right or not. Concept Introduction : Sunk cost : The cost which cannot be recovered

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Answer 1

Question

Chapter 2, Problem 1P

To determine

If the thought of finishing an expensive meal even if the appetite is full is right or not.

Concept Introduction:

Sunk cost: The cost which cannot be recovered

Expert Solution & Answer

Explanation of Solution

This example is based on sunk cost.

The person has bought the expensive meal. despite feeling full, he eats the rest to finish it off because he wants to have a full worth of his money. But actually, this is not giving him anysatisfaction. In an economicsense, his utility will decrease with every additional bite he takes. his marginal utility will be negative and total utility decreases.

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PROBLEM (1) (Rational Choice) Suppose your friend is about to buy a digital camera. A digital camera is identified with three dimensions; 1) resolution (in megapixels), 2) optical zoom (a real number) and 3) battery life (a number of hours). For example, A = (8, 4, 20) is a camera with 8mp resolution and x4 optical zoom and 20 hours of battery life. When he goes into a store, he faces a menu of cameras. When comparing two cameras if camera A is weakly better than B on at least 2 dimensions, it is weakly preferred to the other; written A ≥preferred B. a) Is this preference relation complete? Transitive? Prove it or show an example where the property doesn't hold. b) Suppose the agent chooses from any menu of cameras, a camera that is (weakly) preferred to all other cameras in the menu. Would this choice function be rational, given (a)? Briefly explain your reasoning.

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Answer 2

Question

Chapter 2, Problem 1P

To determine

If the thought of finishing an expensive meal even if the appetite is full is right or not.

Concept Introduction:

Sunk cost: The cost which cannot be recovered

Expert Solution & Answer

Explanation of Solution

This example is based on sunk cost.

The person has bought the expensive meal. despite feeling full, he eats the rest to finish it off because he wants to have a full worth of his money. But actually, this is not giving him anysatisfaction. In an economicsense, his utility will decrease with every additional bite he takes. his marginal utility will be negative and total utility decreases.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 2, Problem 1P

To determine

If the thought of finishing an expensive meal even if the appetite is full is right or not.

Concept Introduction:

Sunk cost: The cost which cannot be recovered

Expert Solution & Answer

Explanation of Solution

This example is based on sunk cost.

The person has bought the expensive meal. despite feeling full, he eats the rest to finish it off because he wants to have a full worth of his money. But actually, this is not giving him anysatisfaction. In an economicsense, his utility will decrease with every additional bite he takes. his marginal utility will be negative and total utility decreases.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 2, Problem 1P

To determine

If the thought of finishing an expensive meal even if the appetite is full is right or not.

Concept Introduction:

Sunk cost: The cost which cannot be recovered

Expert Solution & Answer

Explanation of Solution

This example is based on sunk cost.

The person has bought the expensive meal. despite feeling full, he eats the rest to finish it off because he wants to have a full worth of his money. But actually, this is not giving him anysatisfaction. In an economicsense, his utility will decrease with every additional bite he takes. his marginal utility will be negative and total utility decreases.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 2, Problem 1P

To determine

If the thought of finishing an expensive meal even if the appetite is full is right or not.

Concept Introduction:

Sunk cost: The cost which cannot be recovered

Expert Solution & Answer

Explanation of Solution

This example is based on sunk cost.

The person has bought the expensive meal. despite feeling full, he eats the rest to finish it off because he wants to have a full worth of his money. But actually, this is not giving him anysatisfaction. In an economicsense, his utility will decrease with every additional bite he takes. his marginal utility will be negative and total utility decreases.

Answer 6

Chapter 2, Problem 1P

To determine

If the thought of finishing an expensive meal even if the appetite is full is right or not.

Concept Introduction:

Sunk cost: The cost which cannot be recovered

Expert Solution & Answer

Explanation of Solution

This example is based on sunk cost.

The person has bought the expensive meal. despite feeling full, he eats the rest to finish it off because he wants to have a full worth of his money. But actually, this is not giving him anysatisfaction. In an economicsense, his utility will decrease with every additional bite he takes. his marginal utility will be negative and total utility decreases.

Answer 7

Chapter 2, Problem 1P

To determine

If the thought of finishing an expensive meal even if the appetite is full is right or not.

Concept Introduction:

Sunk cost: The cost which cannot be recovered

Answer 8

Expert Solution & Answer

Explanation of Solution

This example is based on sunk cost.

The person has bought the expensive meal. despite feeling full, he eats the rest to finish it off because he wants to have a full worth of his money. But actually, this is not giving him anysatisfaction. In an economicsense, his utility will decrease with every additional bite he takes. his marginal utility will be negative and total utility decreases.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 2 - Prob. 1P Ch. 2 - Prob. 2P Ch. 2 - Prob. 3P Ch. 2 - Prob. 4P Ch. 2 - Prob. 5P Ch. 2 - Prob. 6P Ch. 2 - Prob. 7P Ch. 2 - Prob. 8P Ch. 2 - Prob. 9P

If the thought of finishing an expensive meal even if the appetite is full is right or not. Concept Introduction : Sunk cost : The cost which cannot be recovered

If the thought of finishing an expensive meal even if the appetite is full is right or not. Concept Introduction: Sunk cost: The cost which cannot be recovered

Explanation of Solution

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Chapter 2 Solutions

If the thought of finishing an expensive meal even if the appetite is full is right or not.

Concept Introduction:

Sunk cost: The cost which cannot be recovered