Suppose a Consumer Is at an Optimum

question 318

Multiple Choice

Suppose a consumer is at an optimum. What happens when the price of one good she has been consuming increases?

• A) The value of the marginal utility of the last unit consumed decreases.
• B) The value of the marginal utility of the last unit consumed increases.
• C) The marginal utility per dollar spent on the last unit consumed of that good increases by the same proportion as the price increases.
• D) The marginal utility per dollar spent on the last unit consumed of that good is now smaller than the marginal utility per dollar spent on other goods the person consumes.

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Definitions:

Indifference

A mental state characterized by a lack of interest, concern, or sympathy towards others or a specific event.

Unfamiliar Setting

A situation or environment that is not previously known or experienced by an individual.

Secure Attachment

A type of emotional bond where individuals feel confident and supported, often resulting from consistent and caring interactions in relationships.

Conservation

The principle in psychology that physical properties such as volume, mass, and number remain the same despite changes in the forms or appearance.