Suppose That After an Increase in Price, a Consumer Chooses

question 55

Multiple Choice

Suppose that after an increase in price, a consumer chooses not to purchase the good because she perceives that the price increase is fundamentally unfair. How does the traditional theory of consumer behavior treat this situation?

• A) By adjusting the budget line
• B) By shifting an indifference curve
• C) By modifying the equal marginal principle
• D) None of the above. The basic theory does not account for this type of situation.

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The act of inhaling and exhaling the smoke of burned substances, most commonly tobacco, which is associated with a range of health risks including respiratory diseases and cancer.

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The state or condition of being not anticipated or foreseen, often leading to surprise.