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:

Extraembryonic Membrane

Membranes formed outside the embryo that play essential roles in its development, including the amnion, yolk sac, allantois, and chorion.

Developing Digestive Tract

The Developing Digestive Tract refers to the formation and maturation of the gastrointestinal system in embryos and fetuses, crucial for nutrient absorption and waste elimination post-birth.

Extraembryonic Membrane

Membranes outside the embryo, such as the amnion, chorion, yolk sac, and allantois, that provide protection and nourishment in vertebrate embryos.

Outermost Membrane

The most external membrane that encloses a cell or organelle, serving as a protective barrier and mediating interactions with the external environment.