Your Budget Constraint for the Two Goods a and B

question 7

Multiple Choice

Your budget constraint for the two goods A and B is 8A + 4B = I, where I is your income.You are currently consuming more than 18 units of B.In order to get 3 more units of A, how many units of B would you have to give up?

• A)6
• B)0.50
• C)0.17
• D)2
• E)None of the above.

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Definitions:

Correlation Coefficient

A numerical indicator that determines the magnitude of the correlation between the relative fluctuations of two variables.

Regression Analysis

An approach in statistics for modeling how a dependent variable is related to one or more independent variables.

Dependent Variable

The variable in an experiment that is expected to change as a result of manipulations to the independent variable.

Residual

The difference between observed and predicted values in a regression analysis.