11 Negative reciprocity When people make an effort to decrease someone elses

11 negative reciprocity when people make an effort to

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11.Negative reciprocity: When people make an effort to decreasesomeone else’s utility in response to being harmed themselves12.The income effect describes the change in consumptionthat results from increased effective wealth due to lower prices.13.Utility comes from two sources: the direct effect of a product and other people’s reactions to the product.14.Income increases as demand for inferior goods decreases.15.The budget constraint line is a line that shows all the possible consumption bundles available to an individual with their income.16.The desire to display the desire to help, such as wearing a T-shirtshowing your “cause,” can have a negative effect because some of theeffort is spent on display instead of on the cause.17.The slope of the budget line stays the same when income changes because the ratio of the prices of the two goods has not 1
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changed.18.Revealed preference is that we can tell what maximizes other people’s utility by observing their behavior. 19.Buyers choose Veblen goods to show others that they can afford flashy expensive goods. 20.The total utility curve initially has a positive slope but it flattens out as additional units consumed add less and less to your total utility. 2
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