Ernie's Utility Function Is U(x, Y)= 32xy

question 25

Multiple Choice

Ernie's utility function is U(x, y) = 32xy.He has 10 units of good x and 8 units of good y.Waldo's utility function for the same two goods is U(x, y) = 3x +5y.Waldo has 9 units of x and 13 units of y.

• A)Waldo prefers Ernie's bundle to his own, but Ernie prefers his own bundle to Waldo's.
• B)Each prefers the other's bundle to his own.
• C)Neither prefers the other's bundle to his own.
• D)Ernie prefers Waldo's bundle to his own bundle, but Waldo prefers his own bundle to Ernie's.
• E)Since they have different preferences, there is not enough information to determine who envies whom.

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