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

question 24

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 $1 per unit and the price of french fries is $4 per unit, then Harry will

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

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Definitions:

Federal Trade Commission Act

A 1914 United States federal law that established the Federal Trade Commission (FTC) to prevent unfair competition and deceptive practices in the marketplace.

Importance

the significance or value attached to something based on its relevance or impact.

Sherman Act

A foundational United States antitrust law enacted in 1890 to prohibit monopolies and practices that restrained trade and competition.

1890

A year significant in economic history, notably for the Sherman Antitrust Act's passage in the United States to combat anti-competitive practices.