Suppose a Consumer Buys Two Goods $x$ And $y$ And Has Income Of

question 71

Multiple Choice

Suppose a consumer buys two goods, $x$ and $y$ and has income of $\$ 30$ . Initially $P _ { x } = 3$ and $P _ { y } = 3$ and the consumer chooses basket $A$ with $x = 7$ and $y = 3$ . The prices change to $P _ { x } = 4$ and $P _ { y } = 2$ and the consumer chooses basket $B$ with $x = 5$ and $y = 5$ .

• A) These choices are consistent with utility maximization.
• B) These choices are not consistent with utility maximization.
• C) With this information it is not possible to determine if these choices are consistent with utility maximization.
• D) Basket B must be preferred to basket A.

---

Definitions:

Developmental Benefits

Positive impacts on growth, skill acquisition, and psychological maturing that result from certain activities, experiences, or therapies during a person’s developmental stages.

Parental Sensitivity

A parent's ability to perceive and respond appropriately to their child's needs, emotions, and signals.

Attachment Relations

The emotional bonds between individuals, particularly between a child and caregiver, that are critical for the child's personal development.

Mirror Images

Psychological constructs where individuals or groups project their own undesirable traits onto others, often exacerbating conflicts or misunderstandings.