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

question 5

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 $70, then her net consumer's surplus

• A) increases by 400.
• B) falls by 2,800.
• C) falls by 600.
• D) falls by 800.
• E) increases by 1,600.

---

Definitions:

Required Condition

A necessary criterion or condition that must be met for a procedure to be carried out or for a statement to be considered true.

Graphical Device

A tool or technology used to create visual representations of data to facilitate understanding.

Degrees of Freedom

In statistics, the number of independent pieces of information available to estimate another piece of information or parameters in a model.

ANOVA

Short for Analysis of Variance, a statistical method used to compare the means of three or more samples to see if at least one differs significantly.