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

question 50

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 $x$ when $\mathrm { I } > \mathrm { P } _ { \mathrm { x } }$ is:

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

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Definitions:

Air Pollutants

Substances in the air that can cause harm to humans and the environment.

Plastic Containers

Manufactured receptacles made from plastic materials, used for storing, transporting, and packaging goods.

Economic Inefficiency

A situation where resources are not allocated in the most effective way, resulting in waste or loss of potential benefit to society.

Externalities

Economic side effects or consequences that affect uninvolved third parties; can be either positive or negative.