Suppose a Consumer Who Purchases Only Two Goods Is Making

question 43

Multiple Choice

Suppose a consumer who purchases only two goods is making a utility-maximizing choice and then the price of one of the goods decreases. What will happen?

• A) The consumer's purchasing power will increase.
• B) The consumer's utility will increase.
• C) The consumer's income will increase.
• D) both a and b
• E) all of the above

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Definitions:

Friendly Fire

Incidents in which persons are inadvertently harmed or killed by forces from their own side during an armed conflict or military operation.

Bailment

The legal relationship established when one person (the bailor) entrusts their personal property to another (the bailee) for a specific purpose, with the expectation of return.

Bailee

A person or entity that temporarily holds property belonging to another under a bailment agreement, responsible for the safekeeping of the property.

Deliver

To physically transfer an item or to fulfill a promise or obligation.