Multiple Choice
Mr. Inflexible's utility function is U(x1,x2) = min(x1,x2) . The price of x1 is $1, the price of x2 is $2, and Mr. Inflexible's budget is $120. If an excise tax of $1 per unit is placed on x1, the utility maximizing bundle is:
A) (40, 20) .
B) (50, 25) .
C) (30, 30) .
D) (20, 40) .
Correct Answer:
Verified
Correct Answer:
Verified
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