Multiple Choice
Pablo's utility function is 
, where x is the number of x's he consumes per week and y is the number of y's he consumes per week. Pablo has $200 a week to spend. The price of x is $1. The price of y is currently $5 per unit. Pablo has received an invitation to join a club devoted to the consumption of y. If he joins the club, Pablo can get a discount on the purchase of y. If he belonged to the club, he could buy y for $1 a unit. How much is the most Pablo would be willing to pay to join this club?
A) $8
B) $28
C) $36
D) $56
E) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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