Higher Indifference Curves Are Preferred to Lower Ones as Long

question 92

Multiple Choice

Higher indifference curves are preferred to lower ones as long as the:

• A) commodities in the bundle are 'healthy'
• B) commodities in the bundle are 'goods'
• C) price of both commodities do not change
• D) budget constraint does not shift

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Definitions:

Framing

The way information is presented to us which can influence our decisions and judgments.

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used.

Restructuring

Thinking about a problem in a new way in order to solve it.

Using Analogies

The process of explaining a concept or idea by comparing it with something else that is more familiar or easier to understand.