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

question 18

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 $19 and was paying a price of $5 for earrings when the price of earrings went up to $11, then the equivalent variation of the price change was

• A) $19.
• B) $38.
• C) $9.50.
• D) $4.75.
• E) $14.25.

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Definitions:

Positive Reinforcement

The process of encouraging or increasing a behavior by following it with a positive stimulus.

Regressive Coping

A defense mechanism where an individual responds to stress by reverting to behaviors typical of an earlier stage of development.

Punishment

A consequence given in response to an unwanted behavior, intended to decrease the likelihood of that behavior occurring again.

Contingency

A future event or circumstance that is possible but cannot be predicted with certainty, often requiring planning for various outcomes.