If Bernice (Whose Utility Function Is Min{x, Y}, Where X

question 18

Multiple Choice

If Bernice (whose utility function is min{x, y}, where x is her consumption of earrings and y is money left for other stuff) had an income of $19 and was paying a price of $5 for earrings when the price of earrings went up to $11, then the equivalent variation of the price change was

• A) $19.
• B) $38.
• C) $9.50.
• D) $4.75.
• E) $14.25.

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Definitions:

Substantial

Significantly valuable, large, or meaningful.

Repudiation

The rejection or refusal to acknowledge or pay a debt, obligation, or contract.

Terminate Contractual Duties

The act of formally ending obligations stipulated in a contract by mutual agreement or as allowed by the contract terms.

Perfect Performance

The fulfillment of all obligations in a contract in the manner that was specified and agreed upon by the parties involved.