In Problem 7, Harry Mazzola Has the Utility Function U(x₁

question 15

Multiple Choice

In Problem 7, Harry Mazzola has the utility function U(x₁, x₂) = min{x₁ + 2x₂, 2x₁ + x₂}. He has $40 to spend on corn chips and french fries. If the price of corn chips is $3 per unit and the price of french fries is $5 per unit, then Harry will

• A) definitely spend all of his income on french fries.
• B) consume at least as many corn chips as french fries but might consume both.
• C) definitely spend all of his income on corn chips.
• D) consume at least as many french fries as corn chips but might consume both.
• E) consume equal amounts of french fries and corn chips.

---

Definitions:

Domestic Equilibrium Prices

Prices of goods and services within a country that are established through the balance of supply and demand without the influence of international trade.

Domestic Quantity Supplied

The amount of a product or service that producers are willing and able to sell within a country's borders at a given price level.

Domestic Quantity Demanded

The total amount of a product that consumers in a specific country are willing and able to purchase at various prices during a given period.

Equilibrium

A state where supply and demand are balanced, leading to a stable market condition.