Katie Kwasi's Utility Function Is U(x₁, X₂) = 2(ln X₁)

question 14

Multiple Choice

Katie Kwasi's utility function is U(x₁, x₂) = 2(ln x₁) + x₂. Given her current income and the current relative prices, she consumes 10 units of x₁ and 15 units of x₂. If her income doubles, while prices stay constant, how many units of x₁ will she consume after the change in income?

• A) 20
• B) 18
• C) 10
• D) 5
• E) There is not enough information to determine how many.

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Definitions:

Population Distribution

The spread of people across locations, often analyzed for understanding demographics or economic conditions.

Skewed

describes a distribution that is not symmetrical, with a longer tail on one side of the peak than the other.

Normal Distribution

A probability distribution that is symmetrical around the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Standard Deviation

Standard deviation is a measure of the dispersion or variability of a set of data points around their mean, indicating how spread out the data points are.