In Problem 6, the Only Quantities of Good 1 That

question 4

Multiple Choice

In Problem 6, the only quantities of good 1 that Barbie can buy are 1 unit or zero units. For x₁ equal to zero or 1 and for all positive values of x₂, suppose that Barbie's preferences were represented by the utility function (x₁ + 6) (x₂ + 4) . Then if her income were $16, her reservation price for good 1 would be

• A) $2.86.
• B) $2.50.
• C) $5.71.
• D) $1.50.
• E) $.57.

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Definitions:

Variance

A measure of the dispersion or spread within a set of data points, indicating the average of the squared deviations from the mean.

Median

The middle value in a data set, which separates the higher half from the lower half when the numbers are arranged in order.

Mode

Most frequently occurring score or value of a variable in a set of data.

Range

The difference between the highest and lowest values in a data set, indicating the span of data points.