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Suppose the Consumer's Utility Function Is Given By U(x,y)=xy+yU ( x , y ) = x y + y

Question 18

Multiple Choice

Suppose the consumer's utility function is given by U(x,y) =xy+yU ( x , y ) = x y + y where MUx=yMUy=x+1\mathrm { MU } _ { \mathrm { x } } = \mathrm { y } \quad \mathrm { MU } _ { \mathrm { y } } = \mathrm { x } + 1
The equation for this consumer's demand curve for y\mathrm { y } when I<Px\mathrm { I } < \mathrm { P } _ { \mathrm { x } } is:


A) yd=0y ^ { d } = 0
B) yd=12Py\mathrm { y } ^ { \mathrm { d } } = \frac { 1 } { 2 P _ { y } }
C) yd=IPy\mathrm { y } ^ { \mathrm { d } } = \frac { I } { P _ { y } }
D) yd=1/2y ^ { d } = 1 / 2

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