Sam's Utility Function Is U(x, Y) = 2x + Y

question 24

Multiple Choice

Sam's utility function is U(x, y) = 2x + y, where x is the number of x's he consumes per week and y is the number of y's he consumes per week. Sam has $200 a week to spend. The price of x is $4. Sam currently doesn't consume any y. Sam has received an invitation to join a club devoted to the consumption of y. If he joins the club, Sam can get a discount on the purchase of y. If he belonged to the club, he could buy y for $1 a unit. How much is the most Sam would be willing to pay to join this club?

• A) Nothing
• B) $100 a week
• C) $50 a week
• D) $40 a week
• E) None of the above.

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Definitions:

Reticular Fibers

Fine, branching fibers composed of collagen and glycoproteins, forming a supportive network in various tissues.

Tensile Strength

The maximum stress that a material can withstand while being stretched or pulled before failing or breaking.

Gas Exchange

The biological process through which organisms exchange oxygen and carbon dioxide with their environment, critical for respiration.

Simple Squamous Epithelium

A single layer of flat, scale-like cells that line surfaces involved in passive diffusion, such as the linings of blood vessels and air sacs of the lungs.