If the Marginal Rate of Substitution of Pepsi for Pizza

question 106

Multiple Choice

If the marginal rate of substitution of pepsi for pizza is six litres of pepsi for one pizza slice, and the price of pepsi is $1 per litre and the price of pizza is $3 per slice, then this consumer should:

• A)trade pepsi for pizza and end up on a higher indifference curve
• B)trade pizza for pepsi and end up on a higher indifference curve
• C)do nothing as they are already maximizing utility
• D)we cannot say without more information

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Definitions:

Attitudes

Mental states or orientations that reflect the evaluations, feelings, and propensities toward aspects of our environment, such as people, objects, and ideas.

Institutional Prejudice

Prejudice that is caused by policies in the workplace that are not intentionally set to exclude members of specific groups or to treat them differently, but which have that effect anyway.

Groupthink

A psychological phenomenon occurring within a group of people, where the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Discriminatory Effect

The negative impact of practices or policies that, intentionally or not, result in unfair treatment of certain groups.