Poindexter's Utility Function Is U(x, Y)= Min{x + 2y, 3x

question 6

Multiple Choice

Poindexter's utility function is U(x, y) = min{x + 2y, 3x + y}, where x is butter and y is guns.If the price of butter is $4 and the price of guns is $5, what would it cost Poindexter to buy the cheapest bundle that he likes as well as 4 units of butter and 3 units of guns?

• A)$31
• B)$32
• C)$29
• D)$28
• E)None of the above.

---

Definitions:

Income Distribution

How a nation’s total GDP is spread amongst its population, impacting the economic welfare of its citizens.

Relative Scarcity

Relative scarcity refers to the situation where a resource is limited in supply when compared to the demand for it.

Marginal Tax Rates

The rate of tax applied to the next dollar of taxable income, which increases as income rises within progressive tax systems.

Dual-Earner Families

Dual-earner families are those where both partners in a household engage in paid employment.