Multiple Choice
Justin consumes goods x and y and has a utility function U(x, y) =x2 + y.The price per unit of x is px and the price per unit of y is py.He has enough money so that he can afford at least 1 unit of either good.When he chooses his best affordable bundle,
A) his budget line must be tangent to the indifference curve passing through this bundle.
B) he must consume only x.
C) he must consume only y if p2x / py exceeds his income.
D) he must consume some of each good if px =py.
E) he must consume some of each good if py = px /2.
Correct Answer:
Verified
Correct Answer:
Verified
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