Harry Mazzola Has the Utility Function U(x₁, X₂) = Min{x₁

question 29

Multiple Choice

Harry Mazzola has the utility function U(x₁, x₂) = min{x₁ + 2x₂, 2x₁ + x₂}. He has $40 to spend on corn chips and french fries. If the price of corn chips is $1 per unit and the price of french fries is $4, then Harry will

• A) consume at least as many french fries as corn chips but might consume both.
• B) consume at least as many corn chips as french fries but might consume both.
• C) definitely spend all of his income on corn chips.
• D) definitely spend all of his income on french fries.
• E) consume equal amounts of french fries and corn chips.

---

Definitions:

International Trade

The exchange of goods and services between countries, allowing for specialization and economies of scale.

Specialization

In economics, it refers to the process by which individuals, businesses, or countries focus on producing a narrow range of goods or services to gain greater efficiencies and improve competitive advantage.

Self-Sufficiency

The condition of being able to satisfy all of one's needs without external assistance.

NAFTA

The North American Free Trade Agreement, a treaty entered into by the United States, Canada, and Mexico; effective in 1994 to eliminate most tariffs on trade between these nations.