Assume an Indifference Map with Other Goods on the Vertical

question 31

Multiple Choice

Assume an indifference map with other goods on the vertical axis and health on the horizontal axis.The government provides families with $400 vouchers that can be redeemed for healthcare services at any hospital,public or private.The budget line for a family that avails this voucher scheme will:

• A)be negatively sloped.
• B)be positively sloped up to $400 and then have a zero slope.
• C)have a zero slope up to $400 and then have a negative slope.
• D)be a straight line with an infinite slope.

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Definitions:

Pleasure Principle

The principle by which the id functions to avoid pain and maximize pleasure.

Id

To Freud, the aspect of personality allied with the instincts; the source of psychic energy, the id operates according to the pleasure principle.

Ego

To Freud, the rational aspect of the personality, responsible for directing and controlling the instincts according to the reality principle. To Jung, the conscious aspect of personality.

Libido

in psychoanalytic theory, refers to the sexual or life drive that motivates individuals to seek pleasure and avoid pain.