Chapters 16-17 Task

1. Eating a steak gives Belinda satisfaction equal to 55 utils, whereas eating a

hamburger gives her a satisfaction of 25 utils. Belinda should:

A) always choose to eat steak over hamburger.

B) always choose to eat hamburger over steak.
C) eat hamburger only if it is cheaper per util than steak.
D) eat steak only if it is cheaper than hamburger.
E) eat hamburger only if she has recently eaten steak.

Refer to the following table to answer the question below.

Chips Marginal Cans Marginal

Consumed Utility
0 —
1 18
2 15
3 12
4 9
5 6
6 3
7 0
Consumed Utility
0 —
1 12
2 10
3 8
4 6
5 4
6 2
7 0

2. Assume that chips cost $1 and cans of soft drink costs $2.Which of the following
combinations of chips and soft drink satisfies the rule?

A) 5 chips and 1 can.

B) 2 chips and 4 cans.
C) 6 chips and 5 cans.
D) 5 chips and 4 cans
E) 6 chips and 7 cans.

3. A flipped coin lands on heads five times in row. Jaime believes the sixth flip will
almost certainly land tails. Jaime is showing an example of: _____________.

A) bad decision-making
B) imperfect information
C) the hot hand fallacy
D) the gambler’s fallacy

4. The ultimatum game shows that people care about:

A) fairness of payoffs.
B) uncertainty of payoffs.
C) long run payoffs.
D) certainty of payoffs.