Suppose Arun Consumes Only 2 Goods -- Books and CDs

question 119

Multiple Choice

Suppose Arun consumes only 2 goods -- books and CDs -- and has a set of downward sloping indifference curves. As Arun moves from one point to another on a particular indifference curve,

• A) the combination of books and CDs that Arun prefers will remain constant, but the level of satisfaction will vary.
• B) the combination of books and CDs will vary, but the level of utility remains constant.
• C) Arun is consuming the same combination of goods, but with varying levels of income.
• D) Arun's level of satisfaction will vary as the combinations of books and CDs varies.
• E) the combination of books and CDs and Arun's income level will remain constant.

---

Definitions:

Fraud

A deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.

Misrepresentation

The act of giving false or misleading information about a matter of fact, which may induce someone to enter into a contract or make a decision they otherwise might not have made.

Rescinds

To annul, rescind, or abolish a law, order, or agreement.

Deceit

A tort involving intentional misrepresentation or cheating by means of some device.