Joe Bob's Cousin Peter Consumes Goods 1 and 2

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

A) U(x₁, x₂) = min{ 2x₁, 4x₂}.
B) U(x₁, x₂) = 20x₁ + 40x₂ - 10,000.
C) U(x₁, x₂) = 2x₁ + 4x₂ + 1,000.
D) U(x₁, x₂) = 4x²₁ + 16x₁x₂ + 16x²₂.
E) More than one of the above does not represent Peter's preferences.

Correct Answer:

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