Which of the Following Is Correct with Respect to the Reasonable

question 131

Multiple Choice

Which of the following is correct with respect to the reasonable person standard?

• A)It makes allowance for mental deficiency.
• B)It makes allowance for physical disability.
• C)It applies an individualized test to children that takes into consideration the child's age, intelligence, and experience.
• D)Two of the above, (b) and (c).

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Definitions:

Inferior Good

A type of good for which demand decreases as the income of consumers increases, opposite to normal goods.

Substitution Effect

The economic principle that as the price of a good rises, consumers will replace it with cheaper alternatives, whereas if its price falls, the good will be favored over more expensive substitutes.

Total Effect

Refers to the entire impact or outcome resulting from a specific action or series of actions, considering all direct and indirect consequences.

Substitution Effect

The change in consumption that occurs when a price change moves the consumer along a given indifference curve to a point with a new tangent and slope.