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

question 24

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 $20 and was paying a price of $1 for earrings when the price of earrings went up to $6, then the equivalent variation of the price change was

• A) $50.
• B) $14.29.
• C) $7.14.
• D) $100.
• E) $32.14.

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Definitions:

Negotiator

A person involved in discussions aimed at reaching an agreement or resolving a conflict between parties.

Principled Negotiation

Principled negotiation is a negotiation strategy that emphasizes mutual interests, fair standards, and objective criteria in the negotiation process, aiming for a win-win outcome for all parties involved.

Objective Standard

A criterion that is not influenced by personal feelings or opinions and can be independently verified.

Overconfidence

A cognitive bias wherein an individual's belief in their own abilities or the accuracy of their knowledge exceeds the reality.