Ike's Utility Function Is U(x, Y) = 25xy

question 41

Multiple Choice

Ike's utility function is U(x, y) = 25xy. He has 12 units of good x and 8 units of good y. Ben's utility function for the same two goods is U(x, y) = 4x + 4y. Ben has 9 units of x and 13 units of y.

• A) Ike prefers Ben's bundle to his own bundle, but Ben prefers his own bundle to Ike's.
• B) Ben prefers Ike's bundle to his own, but Ike prefers his own bundle to Ben's.
• C) Each prefers the other's bundle to his own.
• D) Neither prefers the other's bundle to his own.
• E) Since they have different preferences, there is not enough information to determine who envies whom.