Suppose William Can Choose Between the Consumption of Two Goods

question 91

Multiple Choice

Suppose William can choose between the consumption of two goods. If we observe that William's budget constraint has moved inward, then we know for certain that

• A)his income must have decreased.
• B)he will be indifferent between the two goods.
• C)the price of one or both of the goods must have increased.
• D)his utility will decrease.

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Definitions:

Appraisal Theory

A theory in psychology that describes how individuals evaluate events as beneficial or harmful to their well-being, which then determines their emotional response.

Emotion

A complex psychological state involving subjective feelings, physiological arousal, and observable behavior.

Amygdala

The amygdala is a crucial brain structure within the temporal lobe, involved in emotion regulation, especially fear, and plays a role in memory formation.

Symptoms

Physical or mental features that are regarded as indicating a condition or disease, often noticed by the individual affected.