In Problem 6, Elmer's Utility Function Is U(x, Y) =

question 17

Multiple Choice

In Problem 6, Elmer's utility function is U(x, y) = min{x, y²}. If the price of x is $20, the price of y is $20, and Elmer chooses to consume 8 units of y, what must Elmer's income be?

• A) $2,880
• B) $320
• C) $1,540
• D) $1,440
• E) There is not enough information to tell.

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Definitions:

Market Structure

Market structure refers to the organizational and other characteristics of a market, including the level of competition and the nature of market participants.

Oligopoly

An industry with just a few firms.

Perfect Competition

A market structure characterized by a large number of small firms, homogenous products, free entry and exit from the market, and full information availability, leading to no single firm influencing the market price.

Concentration Ratio

A metric used in economics to assess the degree of market concentration by measuring the market share of the largest firms within an industry.