Kalini Spends All of Her Income on Movie Tickets and Groceries

question 84

Multiple Choice

Kalini spends all of her income on movie tickets and groceries. Suppose Kalini is presented with two options: A and B. Option A gives her a voucher of $X that she can only spend on groceries. Option B gives her $X that she can spend on either or both of the goods (a transfer of cash) . Assuming Kalini prefers Option B to Option A and purchases positive values of movie tickets and groceries, which of the following is correct?

• A) Kalini values the choice that the cash transfer offers.
• B) Kalini does not gain any utility by consuming groceries.
• C) Kalini does not value the choice that the cash transfer offers.
• D) Kalini does not gain any utility by consuming movie tickets.

---

Definitions:

Physical Property

An attribute of a physical system or body; commonly refers to properties like mass, volume, and density that can be observed and measured without changing the substance itself.

Personal Property

Any movable property that is not attached to real estate; includes both tangible and intangible items.

Fee Simple Absolute

Ownership rights entitling the holder to use, possess, or dispose of the property however he or she chooses during his or her lifetime.

Ownership Limitations

Restrictions or constraints on the rights of owning property, which may be imposed by law, regulations, or agreements.