If Bernice (Whose Utility Function Is Min{x, Y}, Where X

question 26

Multiple Choice

If Bernice (whose utility function is min{x, y}, where x is her consumption of earrings and y is money left for other stuff) had an income of $10 and was paying a price of $3 for earrings when the price of earrings went up to $4, then the equivalent variation of the price change was

• A) $2.
• B) $2.50.
• C) $5.
• D) $1.
• E) $2.25.

---

Definitions:

Conflict Escalation

The process by which disputes or conflicts grow in severity and magnitude, potentially becoming more difficult to resolve.

Conflict De-escalation

Strategies or actions aimed at reducing the intensity, hostility, or severity of a dispute to prevent further escalation.

Routine Interaction

Regular and repetitive interactions that occur in a set pattern among individuals or groups within social settings.

Prisoner's Dilemma

A standard example of a game analyzed in game theory that shows why two individuals might not cooperate, even if it appears that it is in their best interest to do so.