Carlos Consumes Only Two Goods, Apples and Bananas

question 35

Multiple Choice

Carlos consumes only two goods, apples and bananas. His utility function is given by U(x, y) = min{x, 2y}. He is endowed with w_a apples and w_b bananas. Unaware that prices are about to change, Carlos buys the quantities of apples and bananas that maximize his utility subject to his budget constraint. After he has made his purchases but before he has eaten them, the relative prices change. Carlos is then free to make further trades at the new relative prices if he wishes.

• A) Carlos will definitely be better off after the price change.
• B) Carlos will definitely be worse off after the price change.
• C) Carlos will be better off after the price change if the price of the good for which he is a net seller rises relative to the price of the other good.
• D) Carlos will be better off after the price change if the price of the good for which he is a net buyer rises relative to the price of the other good.
• E) Carlos's utility will not be affected by the price change.

---

Definitions:

Passive Surveillance

The monitoring of disease or health indicators without active efforts to reach out to individuals or health care providers; relying instead on reports received through routine channels.

Disease X

A placeholder name used by the World Health Organization for a hypothetical, unknown pathogen that could cause a future epidemic.

Baltimore

A major city in Maryland, USA, known for its historical significance and cultural attractions.

Men Aged 40

Refers to males who have reached the age of 40, often considered a demographic group in health studies due to various age-related risk factors.