Yoram's Utility Function Is U(x, Y)= 2x + 5y

question 1

Multiple Choice

Yoram's utility function is U(x, y) = 2x + 5y.The price of x is $4 and the price of y is $15.Yoram has $150 a week to spend on x and y.Yoram is offered a chance to join a club of y consumers.If he joins, he can get y at a price of $10.What is the most that Yoram would be willing to pay to join the club?

• A)Nothing
• B)$30 a week
• C)$50 a week
• D)$75 a week
• E)None of the above.

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Definitions:

Expensive Equipment

High-cost tools, machinery, or hardware required for specific tasks or operations, often implying a significant investment for businesses.

Idle Production Capacity

The unused portion of a company’s production capability at a given time due to lack of demand or inefficiency.

Off-peak Pricing

A pricing strategy that offers discounts during times of lower demand to encourage usage or purchases.

People-based Services

Services that are heavily reliant on human interaction and expertise, as opposed to being automated or provided by machines.