Microeconomics Chapters 19 In Class Assignment Prof Atkins Review Chapter 19 concepts 1. Each of the following are examples of Rational Choice Theory assumptions except: a. Tastes are given b. There is no such thing as a free lunch c. Individuals maximize utility d. Tastes are given 2. "You get what you pay for" is an example of a. Opportunity cost b. Marginal Utility C. Total Utility d. Bounded rationality 3. That after some point, the marginal utility received from each additional unit of a good decreases with each additional unit consumed, defines: a. The principle of diminishing marginal utility b. The principle of rational choice c. Income effect d. Substitution effect 4. According to the principle of rational choice, to maximize utility, choose goods until a. Marginal cost equals marginal benefit. b. The opportunity cost of all alternatives are equal. c. Supply and demand intersect. d. Started from the bottom, now we're here. Case Study: Starbury's Watch the following video then answer the questions below: https://youtu.be/20UFAD69U8?si=PPz_gsXXsMOfkPeB 1. How does the Starbury's case study help us to question the Rational Choice Theory assumption that decision making is costless? 2. How does the Starbury's case study help us to question the Rational Choice Theory assumption that tastes are given?- be mous/ gonna be hick flow Boning have 3. In light of the Starbury's case study, what do you think the demand curve for basketball sneakers looks like for some people? Does it follow the law of demand? Practice Problems 1. Complete the following table of Devon utility from drinking cans of soda and answer the questions below:3. Suppose a small cheese pizza costs $10 and a calzone costs $5. You have $40 to spend. The marginal utility that you derive from each is as follows: Number MU of Pizza MU of Calzone 60 30 40 28 WN 30 24 20 20 10 10 a. How many of each would you buy? b. Suppose the price of a calzone rises to $10. How many of each would you buy? c. Use this to show how the principle of rational choice leads to the law of demand.Finis , this paper mul! All the next. Microeconomics Chapter 11 Lab Session Prof Atkins REVIEW CHAPTER 11 LEARNING OBJECTIVE 11-1 1. Each of the following is a role that firms take on except: Producing goods and services 6. Regulating markets for goods and services C . Selling goods and services d. Organizing factors of production 2. Economists assume that the goal of firms is to: a. Maximize revenue b. Minimize costs C. Maximize profit d. Minimize taxes 3. Peggy-Sue's Cookie are the best in the world. She has been offered a job by Cookie Monster, Inc. to come work at $130,000 per year. Currently, she is producing her own cookies, and she has revenue of $260,000 per year. Her costs are $40,000 for labor, $15,000 for rent, $35,000 for ingredients, and $5,000 for utilities. She invested $100,000 of her own money in the operation which, if she leaves, can be sold for $400,000 that she can invest at 1 percent per year. a. Define accounting profit, | Explicit copT )-3 ,35, 000 b. Define economic profit. Publicit Cost opportunity cost of labor, 4 130,000 c. Calculate Peggy-Sue's accounting profit. of Capital $ 41000 d. Calculate Peggy-Sue's economic profit. = ($400, 000 *0.01 ) REVIEW CHAPTER 11 LEARNING OBJECTIVE 11-2 = 41 134, 000 1. Watch this video on Diminishing Marginal Productivity (or Diminishing Returns) and the Production Function. 2. Use the table below to do the following. a. Complete the marginal product column. b. Compute average product for workers. # Pizza Marginal # Workers (Input) (Output) Product Average Product 10 1 5 5 2 15 10 7. 5 Deacreating 3 20 5 4 22 2 5. 5 5 22 16 18 - 4 3. Complete the exercise from number 2 above of the Chapter 11 part 1 tab of the Excel workbook. a. Complete the marginal product column