Andrew's Utility Function Is U(x₁, X₂)=4x²₁ + X₂

question 14

Multiple Choice

Andrew's utility function is U(x₁, x₂) =4x²₁ + x₂.Andrew's income is $32, the price of good 1 is $16 per unit, and the price of good 2 is $1 per unit.What happens if Andrew's income increases to $80 and prices do not change? (Hint: Does he have convex preferences?)

• A)He will consume 48 more units of good 2 and the same number of units of good 1 as before.
• B)He will increase his consumption of both goods.
• C)He will reduce his consumption of good 2.
• D)He will consume the same number of units of good 2 and 3 more units of good 1 as before.
• E)None of the above.

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Definitions:

Job Interview

A job interview is a formal conversation between a job applicant and a representative of a company or organization aimed at evaluating the applicant’s suitability for a position.

Demarcate

To set the boundaries or limits of; to distinguish or differentiate.

Empowerment

The process of increasing the degree of autonomy and self-determination in people or communities to enable them to represent their interests.

Joint Exploration

A collaborative effort to investigate or discover new information, perspectives, or solutions in a given context.