John and Sally Have Identical Preferences Except That Sally's Utility

question 249

Multiple Choice

John and Sally have identical preferences except that Sally's utility is exactly 10 times John's for each basket of goods. If they have the same income and face the same prices

• A) Sally will consume 10 times the amount that John consumes.
• B) Sally will receive 1/10 the satisfaction of John.
• C) both will consume the same amount of all goods.
• D) John and Sally will have equal total utility.

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Definitions:

Price Appreciation

The increase in value of an asset or security over time.

Rate Of Return

The positive or negative change in the value of an investment over a designated period, expressed as a portion of the investment's initial outlay in percentage terms.

Previous Trading

Historical trading data including prices, volume, and patterns used to predict future market behavior.

Share

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