The Only Quantities of Good 1 That Barbie Can Buy

question 59

Multiple Choice

The only quantities of good 1 that Barbie can buy are 1 unit or 0 units. For x₁ equal to 0 or 1 and for all positive values of x₂, suppose that Barbie's preferences were represented by the utility function (x₁ + 4) (x₂ + 18) . Then if her income were $16, her reservation price for good 1 would be

• A) $13.60.
• B) $6.80.
• C) $9.50.
• D) $0.22.
• E) $4.40.

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Definitions:

Head Injury

Physical trauma to the head, which can lead to various levels of brain injury, ranging from mild concussions to severe brain damage.

Emotional Shock

A psychological condition arising in response to a terrifying or traumatic event, causing a strong emotional impact.

Decay Theory

A theory suggesting that memory fades due to the mere passage of time unless it is actively rehearsed.

Memory Fades

The gradual loss of the ability to recall information or experiences over time.