The Consumer's Utility Function for Goods X and Y Is

question 21

Multiple Choice

The consumer's utility function for goods X and Y is U = 3X + 15Y. Good X is placed on the x-axis and good Y is placed on the y-axis. Which of the following statements is TRUE?
I. The marginal utility of good Y is 15.
II. The MRS_XY = 5.
III. The consumer is always willing to trade away 5 units of good X for 1 unit of good Y.

• A) I and II
• B) II only
• C) I and III
• D) I, II, and III

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Definitions:

Alternative Fuels

Fuels other than the traditional choices (like petroleum), including renewable sources like biofuel, electricity, hydrogen, and others, aimed at reducing pollution and dependency on fossil fuels.

Oil Exploration

The process of searching for oil and gas reserves underground or underwater.

Subsidies

Government grants or financial support to businesses, individuals, or organizations to encourage the production of goods, reduce costs, or support public objectives.

Economic Efficiency

A condition where every resource is optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.