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Joe Bob Has a Cousin Sam Who Consumes Goods

Question 22

Multiple Choice

Joe Bob has a cousin Sam who consumes goods 1 and 2.Sam thinks that 2 units of good 1 is always a perfect substitute for 4 units of good 2.Which of the following utility functions is the only one that would not represent Sam's preferences?


A) U(x1, x2) =16x21 + 16x1x2 + 4x22.
B) U(x1, x2) =min{4x1, 2x2}.
C) U(x1, x2) =40x1 + 20x2 - 10,000.
D) U(x1, x2) =4x1 + 2x2 +1000.
E) More than one of the above does not represent Sam's preferences.

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