Joe Bob from Problem 12 Has a Cousin Martin Who

question 20

Multiple Choice

Joe Bob from Problem 12 has a cousin Martin who consumes goods 1 and 2. Martin thinks that 2 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 Martin's preferences?

• A) U(x₁, x₂) = 40x₁ + 20x₂ - 10,000.
• B) U(x₁, x₂) = 16x²₁ + 16x₁x₂ + 4x²₂.
• C) U(x₁, x₂) = min{ 4x₁, 2x₂}.
• D) U(x₁, x₂) = 4x₁ + 2x₂ + 1000.
• E) More than one of the above does not represent Martin's preferences.