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

question 41

Multiple Choice

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

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

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Definitions:

Self-esteem

One's overall subjective emotional evaluation of their own worth.

Self-serving Bias

A cognitive bias that causes individuals to attribute their successes to internal factors while attributing failures to external factors.

Spotlight Effect

The tendency to overestimate the extent to which others notice and evaluate our appearance, performance, and mistakes.

Narcissism

A personality trait characterized by a long-term pattern of exaggerated self-importance, the need for admiration, and a lack of empathy for others.