A Consumer Has $20 That He Wants to Spend on Two

question 19

Multiple Choice

A consumer has $20 that he wants to spend on two goods: pens priced at $2 each and pencils priced at $1 each.Which of the following correctly represents his budget constraint?

• A) $20 = ($2/Quantity of pens) + ($1/Quantity of pencils)
• B) $20 = ($2 × Quantity of pens) + ($1 × Quantity of pencils)
• C) $20 = ($3/Quantity of pens + Quantity of pencils)
• D) $20 = $3 × (Quantity of pens - Quantity of pencils)

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Definitions:

Statutory Assignment

An assignment of rights that an assignee may enforce if certain conditions are met by the assignment.

Equitable Assignment

An assignment that could be enforced if all parties could be brought before the court.

Constructive Trust

An equitable remedy that imposes a trust-like obligation on someone who has wrongfully obtained or holds legal property rights.

Full Release

A legal agreement in which one party permanently relinquishes all claims against another.