If Ewan Is Consuming His Utility Maximising Bundle and the Price

question 105

Multiple Choice

If Ewan is consuming his utility maximising bundle and the price of one good falls, what happens to the marginal utility per dollar spent on this good (MU/P) , and what should Ewan do?

• A)MU/P has increased, and Ewan should buy more of this good.
• B)MU/P has increased, and Ewan should buy less of this good.
• C)MU/P has decreased, and Ewan should buy more of this good.
• D)MU/P has decreased, and Ewan should buy less of this good.

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Definitions:

Market for Risk

A financial market where individuals and institutions trade financial instruments to manage risk exposure.

Risk Reduction

Strategies or actions taken to minimize the potential for loss or harm in investment, business operations, or other areas of concern.

Probability

The probability or possibility of a particular event happening.

Investing

The act of allocating resources, usually money, with the expectation of generating an income or profit.