Suppose That the Utility Function for Two Commodities Is Given

question 105

Multiple Choice

Suppose that the utility function for two commodities is given by and that the budget constraint is . What values of x and y will maximize utility? ​

• A)​
• B)​
• C)​
• D)​

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Definitions:

2008-2009 Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, initiated in late 2008 due to a financial crisis.

Fiscal Policies

Government policies related to taxation and spending that are used to influence the economy.

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A situation in which the rate of inflation is low and changes very slowly over time.