Whenever One Variable Increases,another Variable Decreases

question 48

Multiple Choice

Whenever one variable increases,another variable decreases.The two variables are

• A)negatively related.
• B)positively related.
• C)definitely related through a third variable.
• D)unrelated to each other.
• E)related but whether positively or negatively related depends on which variable is plotted on the vertical axis.

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Definitions:

Convex Preferences

A characteristic of consumer preference whereby a consumer prefers combinations or mixtures of goods over extreme amounts of single goods, displaying a preference for diversification.

Indifference Curve

A graph showing a combination of two goods that give a consumer equal satisfaction and utility, demonstrating the consumer's preference.

Optimal Consumption

The most efficient allocation of resources and consumption choices based on individual preferences, maximizing utility.

Utility Function

A representation of how a consumer ranks different bundles of goods according to their level of satisfaction or utility.