Three Individuals Have $1000 and Identical Preferences for Gum,g,and Cigarettes,s,as

question 34

Multiple Choice

Three individuals have $1000 and identical preferences for gum,g,and cigarettes,s,as measured by the utility function U(g,s) = 10g^0.9s^0.1.The price of gum is $9 and the price of cigarettes is $12.What is the market surplus/shortage at a price of $12 when the supply of cigarettes is 5?

• A) There will be a shortage of 3 cigarettes.
• B) There will be a surplus of 3 cigarettes.
• C) There will be a shortage of 2/3 cigarettes.
• D) There will be a surplus of 2/3 cigarettes.

---

Definitions:

Anxiety

A mental health condition characterized by feelings of worry, nervousness, or fear that are strong enough to interfere with one's daily activities.

Eccentricity

Eccentricity refers to unusual or deviating from the recognized or customary character, practice, or pattern, often in a whimsical or peculiar manner.

Impulsivity

The tendency to act on urges and desires without considering the long-term consequences.

Antisocial Personality Disorder

A psychological condition defined by persistent behavior that either ignores or infringes upon the rights of other individuals.