Assume the Consumer Is Correctly Applying the Rational Spending Rule

question 53

Multiple Choice

Assume the consumer is correctly applying the rational spending rule for goods jeans and t-shirts.If the price of jeans falls,purchases of jeans and t-shirts rise because

• A)the marginal utility of jeans increases.
• B)the marginal utility of t-shirts increases.
• C)the marginal utility of jeans decreases.
• D)combinations of jeans and t-shirts that could not be considered before now become available.

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Definitions:

Participation

The act of taking part or being actively involved in activities or decisions within a group, organization, or any collective scenario.

Challenging Goals

Objectives set by an individual or an organization that are difficult to achieve and require significant effort and determination.

Specific Goals

Clearly defined, measurable, and time-bound objectives that guide actions and facilitate performance assessment.

Expectancy Theory

A motivational theory suggesting that individuals are more likely to act in certain ways based on the expected results of those actions, particularly in relation to rewards.