Justin Consumes Goods X and Y and Has a Utility

question 61

Multiple Choice

Justin consumes goods x and y and has a utility function U(x, y) = x² + y. The price per unit of x is p_x and the price per unit of y is p_y. He has enough money so that he can afford at least 1 unit of either good. When he chooses his best affordable bundle,

• A) his budget line must be tangent to the indifference curve passing through this bundle.
• B) he must consume only x.
• C) he must consume only y ifexceeds his income.
• D) he must consume some of each good if p_x = p_y.
• E) he must consume some of each good if.

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Definitions:

Pearson Correlation Coefficient

A measure of the linear correlation between two variables X and Y, ranging from -1 to 1.

Strength

In the context of data, it refers to the magnitude or intensity of a relationship between variables, often gauged through correlation coefficients.

Relationship Between Variables

Refers to how one variable may change in relation to alterations in another variable, often measured by statistical tools to understand correlations or dependencies.

Reciprocity

Reciprocity refers to a mutual exchange between two parties, often used in the social sciences to describe social interactions.