Lolita's Utility Function Is U(x, Y)= X - X²/2

question 21

Multiple Choice

Lolita's utility function is U(x, y) = x - x²/2 + y, where x is her consumption of cow feed and y is her consumption of hay.If the price of cow feed is $.10, the price of hay is $1, and her income is $2 and if Lolita chooses the combination of hay and cow feed that she likes best from among those combinations she can afford, her utility will be

• A)0.40.
• B)3.40.
• C)1.90.
• D)2.40.
• E)1.40.

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