Ron Starts Out in Consumer Equilibrium,consuming Two Goods,X and Y

question 64

Multiple Choice

Ron starts out in consumer equilibrium,consuming two goods,X and Y.The price of X rises.Immediately after the rise in price

• A)MU_X/P_X > MU_Y/P_Y,and then Ron increases his consumption of X.
• B)MU_X/P_X > MU_Y/P_Y,and then Ron decreases his consumption of X.
• C)MU_X/P_X < MU_Y/P_Y,and then Ron increases his consumption of X.
• D)MU_X/P_X < MU_Y/P_Y,and then Ron decreases his consumption of X.
• E)none of the above.

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Definitions:

Credit Memorandum

A document issued by a seller that reduces the amount owed by a buyer, typically due to a return or refund.

Note Receivable

A written promise for the amounts to be received by a party, often including interest, by another party.

Adjusted Cash Balance

The cash amount shown on a company's financial statements after adjustments for checks outstanding, deposits in transit, and other necessary adjustments.

NSF Check

A check that cannot be processed because the writer's account does not have sufficient funds, commonly known as a bounced check.