Multiple Choice
Joe Bob has a cousin Ike who consumes goods 1 and 2.Ike thinks that 4 units of good 1 is always a perfect substitute for 2 units of good 2.Which of the following utility functions is the only one that would not represent Ike's preferences?
A) U(x1, x2) =2x1 + 4x2 + 1000.
B) U(x1, x2) +4x21 + 16x1x2 + 16x22.
C) U(x1, x2) = min{2x1, 4x2}.
D) U(x1, x2) =20x1 + 40x2 + 10,000.
E) More than one of the above does not represent Ike's preferences.
Correct Answer:
Verified
Correct Answer:
Verified
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