A Utility-Maximizing Consumer Who Is Considering Two Goods, X and Y

question 19

Multiple Choice

A utility-maximizing consumer who is considering two goods, x and y, would allocate her budget in such a way that

• A)MU_x = MU_y
• B)MU_x > MU_y
• C)MU_x/P_x > MU_y/P_y
• D)MU_x/P_x = MU_y/P_y
• E)MU_x/P_x < MU_y/P_y

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Definitions:

Door-In-The-Face Effect

A compliance technique whereby a large, unreasonable request is made first, followed by a smaller, more reasonable request, which is the actual desired outcome.

Social Loafing

is the phenomenon where individuals exert less effort to achieve a goal when they work in a group than when they work alone.

Compliance

The act of conforming to a request, rule, or expectation.

Social Facilitation

The tendency for people to perform differently, usually better, when in the presence of others compared to when alone.