Betsy's Utility Function for BMWs and Money Is Given by 24,000x

question 12

Multiple Choice

Betsy's utility function for BMWs and money is given by 24,000x + y, where x is the number of BMWs she has and y is the amount of money she has. Her income is $32,000. Her reservation price for one BMW is

• A) $24,000.
• B) $24,000 - p.
• C) $24,000 - y.
• D) $8,000.
• E) $56,000.

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Definitions:

Conservation

The practice of protecting the natural environment and preserving natural resources from loss, degradation, or waste.

Frontier

The edge of a settled area, or the boundary between the known and unknown, often associated with westward expansion in American history.

Railroads

Systems of tracks along which trains run, a major form of transportation for both goods and passengers, historically significant in the development and expansion of countries.

Development

The process of economic growth, expansion, or realization of social and cultural potential within a country or region.