Harry Mazzola Has the Utility Function U(x₁, X₂)=min{x₁ + 2x₂

question 14

Multiple Choice

Harry Mazzola has the utility function U(x₁, x₂) =min{x₁ + 2x₂, 2x₁ + x₂}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $1 per unit and the price of french fries is $4 per unit, then Harry will

• A)consume at least as many corn chips as french fries but might consume both.
• B)consume at least as many french fries as corn chips but might consume both.
• C)definitely spend all of his income on french fries.
• D)definitely spend all of his income on corn chips.
• E)consume equal amounts of french fries and corn chips.

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Definitions:

Importer

An individual or organization that buys goods from other countries for resale or use in the domestic market.

Yen Purchase

The act of buying yen, Japan's currency, which can involve exchanging another currency for yen in foreign exchange markets.

Exchange Rate

The value of one currency for the purpose of conversion to another, indicating how much of one currency can be exchanged for another currency.

Current Account Deficit

A situation where a country's total imports of goods, services, and transfers exceed its total exports, indicating that it is spending more on foreign trade than it is earning.