Lolita, the Holstein Cow, Has a Utility Function Is

question 22

Multiple Choice

Lolita, the Holstein cow, has a utility function is , where x is her consumption of cow feed and y is her consumption of hay. If the price of cow feed is $.10, the price of hay is $1, and her income is $2, and if Lolita chooses the combination of hay and cow feed that she likes best from among those combinations she can afford, her utility will be

• A) 1.90.
• B) 3.40.
• C) 2.40.
• D) 0.40.
• E) 1.40.

---

Definitions:

Bid

An offer made by an investor, trader, or dealer to buy a security, commodity, or currency.

Treasury Bills

Treasury Bills (T-Bills) are short-term U.S. government debt obligations with a maturity of one year or less, considered a safe investment due to government backing.

Financial Instruments

Contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Federal Government

A system of government where powers and responsibilities are divided between a national government and smaller administrative divisions.