Suppose That Jake and Abby Each Win $1,000 in a State

question 18

Multiple Choice

Suppose that Jake and Abby each win $1,000 in a state lottery.Jake spends his winnings on a new television.Abby saves her winnings for a "rainy day." Which of the following is correct?

• A) Both Jake's and Abby's behavior suggest that they base their purchasing decisions on transitory income.
• B) Jake's behavior suggests that he bases his purchasing decisions on transitory income rather than permanent income. Abby's behavior suggest that she bases her purchasing decisions on permanent income rather than transitory income.
• C) Jake's behavior suggests that he bases his purchasing decisions on permanent income rather than transitory income. Abby's behavior suggests that she bases her purchasing decisions on transitory income rather than permanent income.
• D) Both Jake's and Abby's behavior suggest that they base their purchasing decisions on permanent income.

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Definitions:

Mathematical Ratio

A relationship between two numbers indicating how many times the first number contains the second.

Gas Law

A set of laws that describe how the properties of gases (pressure, volume, and temperature) relate to each other.

Mass Spectrometer

An analytical instrument used to identify substances within a sample by separating ions by their mass-to-charge ratio.

Magnetic Field

A field of vectors representing the effects of magnetism on electric currents, moving electric charges, and materials that are magnetic.