Poindexter's Utility Function Is U(x, Y) = Min{x + 2y

question 16

Multiple Choice

Poindexter's utility function is U(x, y) = min{x + 2y, 3x + y}, where x is butter and y is guns. If the price of butter is $4 and the price of guns is $5, what would it cost Poindexter to buy the cheapest bundle that he likes as well as 4 units of butter and 3 units of guns?

• A) $31
• B) $32
• C) $29
• D) $28
• E) None of the above.

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Definitions:

Medicare

A federal health insurance program in the United States for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease.