Assume That the Consumer Is Correctly Applying the Rational Spending

question 160

Multiple Choice

Assume that the consumer is correctly applying the rational spending rule for normal goods X and Z.If the consumer's income increases,purchases of both X and Z rise because

• A) the marginal utility of X decreases.
• B) the price of Z falls.
• C) the marginal utility of Z decreases.
• D) combinations of X and Z that could not be considered before are now available.
• E) the price of X increases.

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Definitions:

Land Degradation

The decline in the quality of land due to various factors, including deforestation, overgrazing, improper irrigation practices, and industrial activity, leading to reduced agricultural productivity.

Polyculture

The cultivation of multiple species of plants and animals simultaneously in the same area, promoting biodiversity and ecological balance.

Nutrients

Chemical compounds that organisms need to live, grow, and reproduce, often obtained from the environment or food.

Soil

The upper layer of the Earth's surface composed of mineral particles, organic matter, water, and air, supporting plant life.