Jane's Utility Function Is U(x, Y) = X + 2y

Jane's utility function is U(x, y) = x + 2y, where x is her consumption of good X and y is her consumption of good Y. Her income is $2. The price of Y is $2. The cost per unit of X depends on how many units she buys. The total cost of x units of X is the square root of x.

A) The bundle () is Jane's utility maximizing choice, given her budget
B) The bundle () is Jane's utility maximizing choice, given her budget.
C) Given her budget, Jane would maximize her utility by spending all of her income on good X.
D) Given her budget, Jane would maximize her utility by spending all of her income on good Y.
E) None of the above.

Correct Answer:

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