Pablo's Utility Function Is , Where X Is the Number

question 7

Multiple Choice

Pablo's utility function is , where x is the number of x's he consumes per week and y is the number of y's he consumes per week. Pablo has $200 a week to spend. The price of x is $1. The price of y is currently $5 per unit. Pablo has received an invitation to join a club devoted to the consumption of y. If he joins the club, Pablo 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 Pablo would be willing to pay to join this club?

• A) $8
• B) $28
• C) $36
• D) $56
• E) None of the above.

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Definitions:

Nembutal

A brand name for pentobarbital, a barbiturate used primarily as a sedative or for euthanasia.

Amphetamines

Stimulant drugs that increase activity in the brain and body, often used to treat ADHD and narcolepsy.

Observations of Behavior

Observations of behavior involve systematically recording the actions of individuals or groups to analyze and understand their conduct.

Consciousness

The awareness of internal and external stimuli, encompassing thoughts, feelings, and surroundings.