Javon Is Consuming His Optimal Utility-Maximizing Consumption Bundle of Lobster

question 215

Multiple Choice

Javon is consuming his optimal utility-maximizing consumption bundle of lobster and macaroni- and-cheese dinners when he loses his job and has less money to spend on lobster and macaroni- and-cheese dinners.Both goods are normal goods.When he adjusts his consumption to reflect the new level of income, the number of macaroni-and-cheese dinners he consumes:

• A)rises.
• B)falls.
• C)stays the same.
• D)changes, but it is impossible to determine in what way.

---

Definitions:

Arbitrage Opportunity

A situation in which it is possible to simultaneously buy and sell an asset or commodities in different markets to profit from price differences.

Long Position

The act of owning or buying an asset with the expectation that its value will increase over time.

Short Position

An investment strategy where an investor sells a security with the intention to buy it back later at a lower price, expecting the security's price to fall.

Negative Alphas

A metric indicating that an investment has underperformed relative to its benchmark, adjusted for the level of risk.