Albert Consumes Only Tangerines and Bananas

question 46

Multiple Choice

Albert consumes only tangerines and bananas.His only source of income is an initial endowment of 30 units of tangerines and 10 units of bananas.Albert insists on consuming tangerines and bananas in fixed proportions, 1 unit of tangerines per 1 unit of bananas.He initially faces a price of $10 per unit for each fruit.The price of tangerines rose to $30 per unit while the price of bananas stayed unchanged.After the price change, he would

• A)increase his consumption of tangerines by exactly 5 units.
• B)decrease his consumption or tangerines by at least 5 units.
• C)increase his consumption of tangerines by exactly 15 units.
• D)decrease his consumption of tangerines by exactly 7 units.
• E)decrease his consumption of bananas by at least 1 unit.

---

Definitions:

Contractual Liability

Liability that arises from entering into a contract, where one party may be obligated to compensate another party for the failure to perform as specified in the contract.

Unidentified Principal

A party in a transaction whose identity is not known to the other party, often in agent-principal relationships.

Disclosed Principal

A disclosed principal is a party whose identity is known by all involved parties at the time a transaction is entered into with an agent.

Undisclosed Principal

is a party in a contractual agreement whose existence and identity are not revealed to the third party at the time of contract formation, often in agency relationships.