Question
wo economists are attending a conference in an unfamiliar city. At the end of the day, Economist A states she is in the mood for
wo economists are attending a conference in an unfamiliar city. At the end of the day, Economist A states she is "in the mood for a high-quality dinner" and wanders through the center of the city looking for a restaurant. After narrowing her search to two fine-dining establishments located on the same block, she ultimately selects the restaurant with the higher prices. Assume you are Economist B and choose to go to a one-price all-you-can-eat buffet nearby. Using economic theory, what might account for the difference in behavior between Economist A and you (assuming cost is not an issue)? How would you go about maximizing your utility compared to Economist A? Next year when you both return to an economics conference in the same city, which of the two restaurants do you think has a higher chance of not being there anymore? Explain.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started