If a Consumer Reallocates His or Her Spending Away from Good

question 29

Multiple Choice

If a consumer reallocates his or her spending away from Good B and towards Good A, then the consumer's total utility will increase if:

• A)MUA/PA > MUB/PB.
• B)MUA/PA < MUB/PB.
• C)MUA/PA > 0 and MUB/PB > 0.
• D)MUA/PA < 0 and MUB/PB < 0.

---

Definitions:

Dollar Terms

Refers to the value of transactions, prices, or economic indicators denominated in the U.S. dollar.

Investment

Disbursing funds with the prospect of accruing income or profits.

GDP

Gross Domestic Product, the total market value of all final goods and services produced within a country in a specific period, a primary indicator of economic health.

Inventory Investment

Inventory Investment is the change in the level of inventory stocks held by businesses over a certain period, which can affect overall economic output.