If a Consumer Consumes Two Goods,X and Y,and Has Indifference

question 260

Multiple Choice

If a consumer consumes two goods,X and Y,and has indifference curves that are bowed inward,the consumer's optional choice occurs when

• A) he consumes that maximum affordable quantity of good X.
• B) he consumes that maximum affordable quantity of good Y.
• C) his indifference curve is tangent to his budget constraint.
• D) his indifference curve lies entirely above his budget constraint.

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Definitions:

Perceptual Errors

are mistakes in judgment that occur when an individual misinterprets sensory stimuli and information from the environment.

Stereotyping

Assigning fixed, generalized attributes to a group of people, often leading to prejudice and discrimination.

Discrimination

Unfair or prejudicial treatment of individuals based on certain characteristics such as race, gender, age, or sexual orientation, rather than on their merits.

Halo Effect

A cognitive bias where one's overall impression of a person, brand, or product influences one's thoughts and feelings about that entity's character or properties.