Multiple Choice
Yoram's utility function is U(x, y) = 2x + 5y. The price of x is $4 and the price of y is $15. Yoram has $150 a week to spend on x and y. Yoram is offered a chance to join a club of y consumers. If he joins, he can get y at a price of $10. What is the most that Yoram would be willing to pay to join the club?
A) Nothing
B) $30 a week
C) $50 a week
D) $75 a week
E) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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