Suppose Arun Consumes Only 2 Goods - Books and CDs

question 26

Multiple Choice

Suppose Arun consumes only 2 goods - books and CDs - and has a set of downward sloping indifference curves.As Arun moves from one point to another on a particular indifference curve,

• A)Arun is consuming the same combination of goods,but with varying levels of income.
• B)the combination of books and CDs will vary,but the level of utility remains constant.
• C)the combination of books and CDs that Arun prefers will remain constant,but the level of satisfaction will vary.
• D)Arun's level of satisfaction will vary as the combinations of books and CDs varies.
• E)the combination of books and CDs and Arun's income level will remain constant.

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Definitions:

Attribution Theory

A social psychology theory focused on how individuals interpret and assign causes to their own and others' behaviors.

Actor-observer Bias

The tendency to attribute one's own actions to external causes while attributing others' actions to internal characteristics.

Self-serving Bias

The common human tendency to attribute positive events to one's own character but attribute negative events to external factors.

Environmental Cause

A factor in the surrounding environment that contributes to the development or outcome of a condition or event.