If Mr Smith Thinks the Last Dollar Spent on Shirts Yields

question 153

Multiple Choice

If Mr. Smith thinks the last dollar spent on shirts yields less satisfaction than the last dollar spent on cola, and Smith is a utility-maximizing consumer, he should

• A) decrease his spending on cola.
• B) decrease his spending on cola and increase his spending on shirts.
• C) increase his spending on shirts.
• D) increase his spending on cola and decrease his spending on shirts.

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Definitions:

Misrepresentation

The act of providing false or misleading information with the intention to deceive in a contractual agreement.

Indemnify

To compensate for loss or damage, or to guarantee protection against future losses.

Void Ab Initio

Describes a contract or agreement that is considered null from its inception, meaning it never had legal validity.

Insurable Interest

A stake in the value of an entity or event for which an insurance policy may be obtained to cover losses.