Ron Starts Out in Consumer Equilibrium, Consuming Two Goods, X

question 51

Multiple Choice

Ron starts out in consumer equilibrium, consuming two goods, X and Y. The price of Y rises. Immediately after the rise in price

• A)MUX/PX > MUY/PY, and then Ron increases his consumption of Y.
• B)MUX/PX > MUY/PY, and then Ron decreases his consumption of Y.
• C)MUX/PX < MUY/PY, and then Ron increases his consumption of Y.
• D)MUX/PX < MUY/PY, and then Ron decreases his consumption of Y.
• E)MUX/PX > MUY/PY, and then Ron increases his consumption of X and Y.

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Definitions:

Emotional Contagion

The phenomenon of experiencing emotions similar to and influenced by those of others around you.

Gustave Le Bon

A French social psychologist best known for his work on crowd psychology and his influential book "The Crowd: A Study of the Popular Mind."

Spiral of Silence

A theory that suggests individuals may refrain from expressing their opinions if they perceive they are in the minority, to avoid social isolation.

Minority Views

Perspectives and opinions that are held by a small segment of the population, often contrasting with mainstream beliefs.