If a Consumer Wishes to Maximize Satisfaction Given Limited Income

question 27

Multiple Choice

If a consumer wishes to maximize satisfaction given limited income and MU_x/P_x < MU_y/P_y then the consumer should:

• A) do nothing because she/he is in equilibrium.
• B) buy more of X and less of Y.
• C) buy more of Y and less of X.
• D) buy more of both X and Y.
• E) buy less of both X and Y.

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Definitions:

Bootstrap Intervals

A technique in statistics to estimate the sampling distribution of an estimator by resampling with replacement from the original data, used to approximate confidence intervals.

Mean Income

The average amount of money earned by individuals or households in a specified region or demographic segment.

Resamples

In statistics, creating new samples from an observed dataset, often to perform bootstrap or permutation tests.

BCa Confidence Intervals

A type of confidence interval used in statistics that adjusts for both bias and skewness in bootstrapping, providing a more accurate interval estimate.