If Ewan Is Consuming His Utility Maximizing Bundle and the Price

question 250

Multiple Choice

If Ewan is consuming his utility maximizing bundle and the price of one good falls, what happens to the marginal utility per dollar spent on this good (MU/P) , and what should Ewan do?

• A)MU/P has increased and Ewan should buy more of this good.
• B)MU/P has increased and Ewan should buy less of this good.
• C)MU/P has decreased and Ewan should buy more of this good.
• D)MU/P has decreased and Ewan should buy less of this good.

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Definitions:

Contracts

Legal agreements between two or more parties that are enforceable by law.

Unauthorized Acts

Actions taken without the necessary permission or authority, often violating agreements or laws.

Principal

The main party to a transaction or contract who has authorized another (an agent) to act on their behalf, or the primary sum of money owed on a loan, excluding interest.

Third Party

An individual or entity that is not a direct participant or primary party involved in a transaction or legal matter.