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

question 18

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 $11 per week and was paying a price of $4 per pair of earrings, then if the price of earrings rose to $8, the compensating variation of that price change (measured in dollars per week) would be closest to

• A)$4.89.
• B)$17.60.
• C)$18.60.
• D)$8.80.
• E)$16.60.

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Definitions:

Cardiovascular Fitness

The ability of the heart, lungs, and vascular system to efficiently supply oxygenated blood to working muscles during physical activity.

Subcutaneous Tissues

The layer of tissue lying directly under the skin, consisting of fat and connective tissues that house larger blood vessels and nerves.