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:

Generalizable

The extent to which the findings from a study can be applied or extended to groups or situations beyond the initial research setting.

Real-Life Situations

Scenarios or events occurring in actual life, outside of controlled or artificial environments.

Animal Studies

Studies that attempt to test theories of psychopathology using animals.

Ethical Issues

Concerns or dilemmas that arise in a situation, requiring a choice between competing ethical principles or values.