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MsQuasimodo Has the Utility Function U(x, M)= 100x - X2/2

Question 28

Multiple Choice

Ms.Quasimodo has the utility function U(x, m) = 100x - x2/2 + m, where x is her consumption of earplugs and m is money left over to spend on other stuff.If she has $10,000 to spend on earplugs and other stuff and if the price of earplugs rises from $50 to $75, then her net consumer's surplus


A) falls by 937.50.
B) falls by 625.
C) falls by 2,937.50.
D) increases by 468.75.
E) increases by 1,875.

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