Use the Following for Questions 61-69

question 180

Multiple Choice

Use the following for questions 61-69.

-(Exhibit: Consumer Equilibrium 1) Assume that the price of both goods X and Y is $1 per unit, and you have $10 of income to spend on both goods.To maximize utility, you would consume ________ units of X and _______ units of Y.

• A) 3; 4
• B) 4; 3
• C) 4; 6
• D) 5; 5

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Definitions:

Liberalism

The political philosophy according to which the government should choose policies deemed just, as evaluated by an impartial observer behind a “veil of ignorance”.

Sum of Utility

The total satisfaction or benefit derived from consuming a particular set of goods or services.

Income Inequality

Refers to the uneven distribution of income and wealth across the different participants in an economy.

In-kind Transfers

Non-cash benefits provided by the government to individuals, such as food stamps, housing assistance, and medical services, aimed at meeting basic needs.