Mr Inflexible's Utility Function Is U(x₁,x₂)= Min(x₁,x₂)

question 53

Multiple Choice

Mr. Inflexible's utility function is U(x₁,x₂) = min(x₁,x₂) . The price of x₁ is $1, the price of x₂ is $2, and Mr. Inflexible's budget is $120. If an excise tax of $1 per unit is placed on x₁, the utility maximizing bundle is:

• A)(40, 20).
• B)(50, 25).
• C)(30, 30).
• D)(20, 40).

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