A Consumer Has Preferences Over Two Goods, X and Y

question 423

Multiple Choice

A consumer has preferences over two goods, X and Y. Suppose we graph this consumer's preferences (which satisfy the usual properties of indifference curves) and budget constraint on a diagram with X on the horizontal axis and Y on the vertical axis. At the consumer's current consumption bundle, the consumer is spending all available income, and the marginal rate of substitution is less than the slope of the budget constraint. We can conclude that the consumer

• A)is currently maximizing satisfaction subject to the budget constraint.
• B)could increase satisfaction by consuming more X and less Y.
• C)could increase satisfaction by consuming less X and more Y.
• D)could purchase more X and more Y and increase total satisfaction.

---

Definitions:

Friends

Individuals with whom one shares a bond of mutual affection, typically exclusive of sexual or family relations.

Socialization

The process through which individuals learn and internalize the values, beliefs, and norms of their society and culture, shaping their sense of self and their behavior.

Conversation

The informal exchange of ideas, information, and feelings between two or more people through spoken words or written text.

Conflict Theory

focuses on the social and material inequalities of different groups in a society, suggesting that these conflicting interests are the engine of social change.