- Use the Indifference Curves and the Budget Lines in Figure

question 81

Multiple Choice

- Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.In Figure 19.3,point E

• A)Is optimal and affordable.
• B)Gives the consumer a very high level of utility and is affordable.
• C)Is a very high level of utility but not affordable.

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Definitions:

Framing Effect

The influence of context or wording on people's decisions and judgments.

Pythagorean Theorem

A fundamental relation in Euclidean geometry among the three sides of a right triangle that states that the square of the length of the hypotenuse is equal to the sum of the squares of the lengths of the other two sides.

Algorithm

A systematic procedure for solving a problem that works invariably when it is correctly applied.

Prototypes

The best or most typical example of a particular category or concept, often used as a basis for understanding or judgment.