Joe Bob from Problem 12 Has a Cousin Pete Who

question 5

Multiple Choice

Joe Bob from Problem 12 has a cousin Pete who consumes goods 1 and 2. Pete thinks that 3 units of good 1 is always a perfect substitute for 4 units of good 2. Which of the following utility functions is the only one that would not represent Pete's preferences?

• A) U(x₁, x₂) = 40x₁ + 30x₂ - 10,000.
• B) U(x₁, x₂) = 4x₁ + 3x₂ + 1000.
• C) U(x₁, x₂) = min{ 4x₁, 3x₂}.
• D) U(x₁, x₂) = 16x²₁ + 24x₁x₂ + 9x²₂.
• E) More than one of the above does not represent Pete's preferences.

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