Joe Bob from Problem 12 Has a Cousin Pete Who

Joe Bob from Problem 12 has a cousin Pete who consumes goods 1 and 2. Pete thinks that 3 units of good 1 is always a perfect substitute for 4 units of good 2. Which of the following utility functions is the only one that would not represent Pete's preferences?

A) U(x₁, x₂) = 40x₁ + 30x₂ - 10,000.
B) U(x₁, x₂) = 4x₁ + 3x₂ + 1000.
C) U(x₁, x₂) = min{ 4x₁, 3x₂}.
D) U(x₁, x₂) = 16x²₁ + 24x₁x₂ + 9x²₂.
E) More than one of the above does not represent Pete's preferences.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Sign up to view answer