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:

Sympathetic Nervous System

Part of the autonomic nervous system that prepares the body for physical activity by accelerating the heart rate, constricting blood vessels, and raising blood pressure among other functions.

Adrenal Gland

An endocrine gland located above the kidney that produces various hormones, including adrenaline and steroids.

Pituitary Gland

A pea-sized gland at the base of the brain that secretes hormones regulating growth, metabolism, and reproductive processes.

Hypothalamus

A region of the brain responsible for producing hormones that control bodily functions like temperature, hunger, and sleep.