Ms Quasimodo in Problem 3 Has the Utility Function U(x

question 17

Multiple Choice

Ms. Quasimodo in Problem 3 has the utility function U(x, m) , where x is her consumption of earplugs and m is money left over to spend on other stuff. If she has $10,000 to spend on earplugs and other stuff and if the price of earplugs rises from $50 to $85, then her net consumer's surplus

• A) falls by 1,137.50.
• B) falls by 3,137.50.
• C) falls by 525.
• D) increases by 568.75.
• E) increases by 2,275.