When Prices Are ($2, $10), Emil Chooses the Bundle (1

question 20

Multiple Choice

When prices are ($2, $10) , Emil chooses the bundle (1, 6) , and when prices are ($12, $4) , he chooses the bundle (7, 2) .

• A)Emil violates WARP.
• B)Emil has kinked indifference curves.
• C)The bundle (1, 6)is revealed preferred to (7, 2), but (7, 2)is not revealed preferred to (1, 6).
• D)The bundle (7, 2)is revealed preferred to (1, 6), but (1, 6)is not revealed preferred to (7, 2).
• E)None of the above.

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Definitions:

Consumption Expenditures

The total amount spent by consumers on goods and services within a specified period.

Households

Individuals or groups living together who make joint decisions on consumption and resource allocation, forming the basic consuming unit in an economy.

Product Market

The marketplace in which final goods or services are offered to consumers, businesses, and the public sector.

Labor

The human effort, both physical and mental, that is used to produce goods and services.