Michael Kawamura, a Careful Maximizer of Utility, Consumes Only Two

question 69

Multiple Choice

Michael Kawamura, a careful maximizer of utility, consumes only two goods, peanut butter and ice cream.He had just achieved the utility-maximizing solution in his consumption of the two goods when the price of peanut butter fell.As he adjusts to this event:

• A) the marginal utility of peanut butter and of ice cream will rise.
• B) the marginal utility of peanut butter and of ice cream will fall.
• C) the marginal utility of peanut butter will fall, and the marginal utility of ice cream will rise.
• D) the marginal utility of peanut butter will rise, and the marginal utility of ice cream will fall.

---

Definitions:

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, often denoted by alpha (α).

Alternative Hypothesis

A hypothesis that contradicts the null hypothesis, indicating that there is a significant difference between specified populations.

Significance Level

Another term for level of significance, denoting the cutoff probability for determining when the p-value indicates a statistically significant result.

Nonparametric Tests

Statistical tests not based on assumptions about the form or parameters of the population distribution from which the samples are drawn.