Multiple Choice
Joe Bob 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 +0 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
Correct Answer:
Verified
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