Fanny Consumes X and Y

question 32

Multiple Choice

Fanny consumes x and y.The price of x is $9 and the price of y is $9.Fanny's only source of income is her endowment of 12 units of x and 12 units of y which she can buy or sell at the going prices.She plans to consume 13 units of x and 11 units of y.If the prices change to $12 for x and $12 for y,

• A)she is better off.
• B)she is worse off.
• C)she is neither better off nor worse off.
• D)she is better off if she has nonconvex preferences.
• E)We can't tell whether she is better off or worse off unless we know her utility function.

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Definitions:

Moral Judgments

Evaluations or decisions about the rightness or wrongness of actions that reflect ethical standards or principles.

Pursue Goals

The act of identifying and working towards achieving specific objectives or aspirations.

Excessive Guilt

An overwhelming feeling of responsibility or remorse for perceived offenses or mistakes, beyond what is considered rational or justified.

Trying New Things

The behavior of experimenting with activities or experiences that one has not previously encountered, often to gain new skills or insights.