The Only Quantities of Good 1 That Barbie Can Buy

question 75

Multiple Choice

The only quantities of good 1 that Barbie can buy are 1 unit or 0 units.For x₁ equal to 0 or 1 and for all positive values of x₂, suppose that Barbie's preferences were represented by the utility function (x₁ + 8) (x₂ + 16) .Then if her income were $4, her reservation price for good 1 would be

• A)$4.44.
• B)$8.50.
• C)$2.22.
• D)$.50.
• E)$1.90.

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Definitions:

Biological Predisposition

A natural tendency or inclination to behave or react in a particular way, often with a genetic basis influencing susceptibility to specific conditions or diseases.

Observational Learning

The process of learning behaviors by watching and imitating others, as identified in the social learning theory.

Operant Conditioning

A learning process in which the strength of a behavior is modified by reinforcement or punishment, a concept developed by B.F. Skinner.

Classical Conditioning

Classical conditioning is a learning process through which an association is made between a naturally occurring stimulus and a previously neutral stimulus.