When a Consumer Shifts His Purchases from Product a to Product

question 56

Multiple Choice

When a consumer shifts his purchases from product A to product B, the marginal utility of

• A) A falls and the marginal utility of B will increase.
• B) both A and B will decrease.
• C) A increases and the marginal utility of B will fall.
• D) both A and B will increase.

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Definitions:

Entry Price

Refers to the initial cost at which an asset, security, or investment is purchased, marking the basis for future financial analysis.

Equity Instrument

A financial instrument indicating ownership in an entity, such as common stock or preferred shares, that represents a claim on the entity's residual assets after liabilities have been deducted.

Risk Management Strategy

A process of identifying, assessing, and controlling threats to an organization's capital and earnings.

Net Exposure Basis

A method of measuring risk that combines both the gross positive and negative positions to determine an entity's overall exposure.