Ike's Utility Function Is U(x, Y)= Xy

question 20

Multiple Choice

Ike's utility function is U(x, y) = xy.Ike consumes 2 units of x and 8 units of y.

• A)Ike would be willing to make small exchanges of x for y in which he would give up 4 units of x for every unit of y he got.
• B)Ike would be willing to trade away all of his x for y as long as he got more than 4 units of y for every unit of x he gave up.
• C)Ike will always be willing to make trades at any price if he does not have equal amounts of the two goods.
• D)Ike likes x and y equally well so he is always willing to exchange 1 unit of either good for more than 1 unit of the other.
• E)None of the above.

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Definitions:

Cicatrix

The medical term for a scar that is left on the skin after a wound has healed.

Comedo

A clogged hair follicle in the skin, often seen in conditions like acne; can be open (blackhead) or closed (whitehead).

Epidermis

The outermost layer of the skin, serving as the primary barrier against the environment.

Dermis

The thick layer of living tissue below the epidermis that forms the true skin, containing sweat glands, hair follicles, and other structures.