Faced with Two Goods to Buy, Good 1 and Good

question 11

Multiple Choice

Faced with two goods to buy, good 1 and good 2, a utility-maximizing individual will buy according to which of the following statements?

• A) price of good 1 = price of good 2
• B) MU of good 1 = MU of good 2
• C) price of good 1 divided by MU of good 2 = price of good 2 divided by MU of good 1
• D) MU of good 1 divided by price of good 1 = MU of good 2 divided by price of good 2

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Definitions:

Premack Principle

A principle in psychology that states that more probable behaviors will reinforce less probable behaviors.

Negative Reinforcement

The removal of a stimulus to increase the probability that a behavior will be repeated.

Positive Punishment

The addition of a stimulus to decrease the probability that a behavior will recur.

Primary Reinforcement

A term in behavioral psychology that refers to something that is naturally rewarding or satisfying, like food or water, that reinforces a behavior.