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Hans Has $27 Which He Decides to Spend on X

Question 60

Multiple Choice

Hans has $27 which he decides to spend on x and y. Commodity x costs $16 per unit and commodity y costs $10 per unit. He has the utility function U(x, y) = 5x2 + 2y2 and he can purchase fractional units of x and y. Hans will choose


A) only x.
B) only y.
C) some of each commodity but more y than x.
D) some of each commodity but more x than y.
E) equal amounts of the two commodities.

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