Harmon's Utility Function Is U(x₁, X₂) = X₁x₂

question 13

Multiple Choice

Harmon's utility function is U(x₁, x₂) = x₁x₂. His income is $100. The price of good 2 is p₂ = 4. Good 1 is priced as follows. The first 15 units cost $4 per unit and any additional units cost $2 per unit. What consumption bundle does Harmon choose?

• A) (12.5, 12.5)
• B) (25, 12.5)
• C) (12.5, 25)
• D) (15, 10)
• E) None of the above.

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Definitions:

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A psychological tool developed by George Kelly, used to assess how individuals construe significant people in their lives.

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A method used in personal construct psychology to assess an individual's system of personal constructs, involving comparing and contrasting significant people in one's life.