Bernice Has the Utility Function U(x, Y)= Min{x, Y}

question 8

Multiple Choice

Bernice has the utility function u(x, y) = min{x, y}, where x is the number of pairs of earrings she buys per week and y is the number of dollars per week she has left to spend on other things.(We allow the possibility that she buys fractional numbers of pairs of earrings per week.) If she originally had an income of $20 per week and was paying a price of $2 per pair of earrings, then if the price of earrings rose to $5, the compensating variation of that price change (measured in dollars per week) would be closest to

• A)$20.
• B)$41.
• C)$40.
• D)$10.
• E)$39.

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Definitions:

Lowered Performance

A decrease in efficiency, quality, or output in any performance setting.

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A sense of belonging to a particular racial group and the significance and meaning individuals attribute to this identification in their social and personal lives.

Interaction

The reciprocal action or influence between entities, which may involve communication, influence, or observable responses.

Quasi-Experiment

A research design that resembles experimental research but lacks random assignment to treatment or control groups, making causal inferences more challenging.