Suppose the Consumer's Utility Function Is Given By $U ( x , y ) = x y + y$

question 18

Multiple Choice

Suppose the consumer's utility function is given by $U ( x , y ) = x y + y$ where $\mathrm { MU } _ { \mathrm { x } } = \mathrm { y } \quad \mathrm { MU } _ { \mathrm { y } } = \mathrm { x } + 1$
The equation for this consumer's demand curve for $\mathrm { y }$ when $\mathrm { I } < \mathrm { P } _ { \mathrm { x } }$ is:

• A) \(y ^ { d } = 0\)
• B) \(\mathrm { y } ^ { \mathrm { d } } = \frac { 1 } { 2 P _ { y } }\)
• C) \(\mathrm { y } ^ { \mathrm { d } } = \frac { I } { P _ { y } }\)
• D) \(y ^ { d } = 1 / 2\)