Suppose the Consumer's Utility Function Is Given by U(x,y) = $x$

question 27

Multiple Choice

Suppose the consumer's utility function is given by U(x,y) = xy + y where MU_x = y MU_y = x+1
The equation for this consumer's demand curve for $x$ when I < P_x is

• A) x^d = 0
• B) x^d = \(\frac { I } { 2 P _ { x } }\)
• C) x^d = \(\frac { I } { 2 P _ { x } }\) -\(\frac { 1 } { 2 }\)
• D) x^d = 1/2

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Definitions:

Quantity Supplied

The volume of a commodity or service that sellers are ready and capable of providing at a specific price within a given period.

Surplus

An excess of production or supply over demand, often resulting in lower prices.

Cutting

The act or process of reducing something in size, amount, or extent.

Prices

The budget anticipated, required, or dealt in exchange for a commodity.