An Alternative Way of Looking at the Consumer's Utility Maximization

question 34

Multiple Choice

An alternative way of looking at the consumer's utility maximization decision is called duality in consumer theory, which consists in:

• A) looking at the optimum in consumption in terms of setting the marginal utilities equal to the ratio of prices rather than looking at the point where an indifference curve is tangent to a budget line.
• B) choosing the lowest budget line that touches a given indifference curve rather than choosing the highest indifference curve, given a budget constraint.
• C) constructing a Lagrangian multiplier instead of focusing on the equal marginal principle.
• D) decomposing the effects of a price change on consumption, without recourse to budget lines.

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Definitions:

Relative Deprivation

The experience of feeling deprived of something to which one believes they are entitled, often in comparison to others.

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A measure or state reflecting the degree of contentment or joy experienced by an individual.

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Physical activity that depends on the aerobic energy-generating process, typically involving moderate intensity over extended time periods, such as running or cycling.

Control Of Time

The ability or the perceived ability to manage, allocate, and effectively use time for various tasks and activities.