A Parent Has Two Children Living in Cities with Different

Multiple Choice

A parent has two children living in cities with different costs of living.The cost of living in city B is 2 times the cost of living in city A.The child in city A has an income of $5,000 and the child in city B has an income of $10,000.The parent wants to give a total of $4,000 to her two children.Her utility function is U(C_A, C_B) = C_AC_B, where C_A and C_B are the consumptions of the children living in cities A and B respectively.She will choose to give

A) each child $2,000, even though this will buy less goods for the child in city B
B) the child in city B twice as much money as the child in city A.
C) the child in city A twice as much money as the child in city B.
D) the child in city B the same amount of money as the child in city A.
E) the child in city A the same amount of money as the child in city B.