Figure 19-2

question 331

Multiple Choice

Figure 19-2.The figure shows a utility function for Mary Ann.
-Refer to Figure 19-2.Suppose the vertical distance between the points (0,A) and (0,B) is 5.If her wealth increased from $1,050 to $1,350,then

• A) Mary Ann's subjective measure of her well-being would increase by less than 5 units.
• B) Mary Ann's subjective measure of her well-being would increase by more than 5 units.
• C) Mary Ann would change from being a risk-averse person into a person who is not risk averse.
• D) Mary Ann would change from being a person who is not risk averse into a risk-averse person.

---

Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a product and the quantity of the product demanded at those prices.

Unused Capacity

The portion of a system's or facility's total capacity that is not currently being utilized for production or services.

Price Point

The price level for a product or service that is perceived as fair or competitive by customers.

Chase Strategy

A management approach that adjusts production rates to align with fluctuations in demand, aiming to match output with demand and minimize inventory costs.