Suppose the Only Two Goods That Charlie Consumes Are Wine

question 377

Multiple Choice

Suppose the only two goods that Charlie consumes are wine and cheese. When wine sells for $10 a bottle and cheese sell for $10 a pound, he buys 6 bottles of wine and 4 pounds of cheese - spending his entire income of $100. One day the price of wine falls to $5 a bottle and the price of cheese increases to $20 a pound, while his income does not change. The bundle of wine and cheese that he purchased at the old prices now costs

• A)the same amount at the new prices.
• B)less than Charlie's income at the new prices.
• C)more than Charlie's income at the new prices.
• D)We do not have enough information to answer the question.

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Definitions:

Stressors

External factors or stimuli that cause stress or tension in an individual's life, potentially affecting their mental and physical well-being.

Homeostasis

The process by which organisms maintain a stable internal environment in the face of external changes.

Distress

Negative stress that can result in anxiety or concern, often triggered by unpleasant events or situations.

Eustress

Positive stress that motivates and energizes individuals, leading to improved performance and well-being.