Let the Price of Some Good X Exceed the Price

question 2

Multiple Choice

Let the price of some good X exceed the price of a second good Y.In consumer equilibrium, it must be true that

• A)total utility derived from both X and Y has begun to decline.
• B)the marginal utility of X exceeds the marginal utility of Y.
• C)the marginal utility of X equals the marginal utility of Y.
• D)the marginal utility of Y exceeds the marginal utility of X.
• E)any of the above could be, depending upon economic circumstance.

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Definitions:

Pluralistic Ignorance

A psychological state where individuals mistakenly believe their thoughts, feelings, or behaviors are different from those of the group, often due to a lack of open communication.

Bystander Effect

A social psychological theory that suggests that individuals are less likely to offer help to a victim when other people are present, often due to a diffusion of responsibility.

Diffusion of Responsibility

The phenomenon where individuals in a group are less likely to take action or feel accountable, assuming that others will do so.

Commons Dilemma

A situation in which individuals' short-term selfish interests conflict with long-term group welfare, often relating to resource management.