Multiple Choice
Joe Bob has a cousin Martin who consumes goods 1 and 2.Martin 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 Martin's preferences?
A) U(x1, x2) =40x1 + 20x2 - 10,000.
B) U(x1, x2) =16x21 +16x1x2 + 4x22.
C) U(x1, x2) = min{4x1, 2x2}.
D) U(x1, x2) =4x1 + 2x2 + 1000.
E) More than one of the above does not represent Martin's preferences.
Correct Answer:
Verified
Correct Answer:
Verified
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