-Refer to Figures D and E

Multiple Choice

-Refer to Figures d and e.Bundle A is preferred to bundle B in Figure e and not figure d because

A) The MRS between water in a rainy season and during a drought is higher in e than in d
B) As the probability of a drought increases, consumers are no longer indifferent between the two bundles
C) As the probability of a drought decreases, water in a rainy season becomes less valuable
D) Consumers are indifferent between bundles A and B as the probability of a drought increases