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Assume That the Consumer Is Correctly Applying the Rational Spending

Question 53

Multiple Choice

Assume that the consumer is correctly applying the rational spending rule for goods X and Z.The proper sequence of events is


A) the price of X falls,then purchases of X increase,then MUx/Px falls.
B) purchases of X increases,then the price of X falls,then MUx/Px falls.
C) MUx/Px falls,then the price of X falls,then purchases of X increase.
D) the price of X falls,then MUx/Px increases,then purchases of X increase.
E) purchase of X increase,then MUx/Px falls,then the price of X falls.

Correct Answer:

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