Jane Is a Utility-Maximizing Consumer Who Is Consuming the Optimal

question 322

Essay

Jane is a utility-maximizing consumer who is consuming the optimal quantity of wallets and eyeglasses and spending her entire budget.The price of wallets falls.Jane will:
A.decrease her consumption of wallets if wallets are an inferior good and the income effect is weaker than the substitution effect.
B.increase her consumption of wallets if wallets are an inferior good and the income effect is stronger than the substitution effect.
C.increase her consumption of wallets if wallets are a normal good, as the income effect reinforces the substitution effect.
D.decrease her consumption of wallets if wallets are a normal good and the income effect reinforces the substitution effect.

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Definitions:

House's Path-Goal

A leadership theory that suggests leaders can increase subordinate satisfaction and performance by clarifying and clearing the paths to their goals, taking into account the work environment and the characteristics of the employees.

Worker Self-Confidence

The belief employees have in their own abilities to carry out tasks and achieve goals.

Substitutes for Leadership

Factors or conditions that make the direct leadership less necessary or irrelevant, such as highly routine jobs or comprehensive work processes.

Work Setting

The surroundings, both social and physical, where individuals carry out their work.