Joe Bob from Problem 12 Has a Cousin Ike Who

question 11

Multiple Choice

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

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

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Definitions:

Expectancy

The belief or anticipation that a certain action will lead to a desired outcome, often related to motivation.

Theory X

A management theory assuming that employees are inherently lazy and will avoid work if possible, necessitating control and coercion by management.

Conventional

Refers to what is traditional, accepted, or expected by society; often contrasted with innovative or unconventional methods or ideas.

Projection

In psychology, a defense mechanism where individuals ascribe their own unacceptable feelings or thoughts onto others.