The Theory of Bounded Rationality Suggests That as Price Rises

question 95

Multiple Choice

The theory of bounded rationality suggests that as price rises:

• A) MU/P may not decline.
• B) MU/P will always decline.
• C) the opportunity cost of the good will decline.
• D) marginal utility will decline.

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Definitions:

NSF Check

A check that has been declined by a bank due to insufficient funds in the account it was drawn on.

Adjusted Cash Balance

The cash amount reflected in the accounting records after adjustments for items like outstanding checks and deposits-in-transit.

Deposits In Transit

Funds that have been sent to a bank but not yet recorded by the bank in the account holder's bank statement.

Outstanding Checks

Checks that have been issued by a company but have not yet been cashed or cleared by the bank.