If Bernice (Whose Utility Function Is Min{x, Y}, Where X

question 23

Multiple Choice

If Bernice (whose utility function is min{x, y}, where x is her consumption of earrings and y is money left for other stuff) had an income of $20 and was paying a price of $1 for earrings when the price of earrings went up to $6, then the equivalent variation of the price change was

• A)$50.
• B)$14.29.
• C)$7.14.
• D)$100.
• E)$32.14.

---

Definitions:

UCC

United States commercial ventures are directed by the broad legal standards set within the Uniform Commercial Code.

Shipment Contract

A type of contract specifying that the seller is obligated to send the goods to the buyer, but the risk of loss passes to the buyer when the goods are duly delivered to the carrier.

Tender Of Delivery

A requirement that a seller/lessor have and hold conforming goods at the disposal of the buyer/lessee and give the buyer/lessee reasonable notification to enable him or her to take delivery.

Risk Of Loss

A provision in contracts determining who bears the risk for damage to goods after purchase but before delivery.