The Only Quantities of Good 1 That Barbie Can Buy

question 79

Multiple Choice

The only quantities of good 1 that Barbie can buy are 1 unit or 0 units.For x₁ equal to 0 or 1 and for all positive values of x₂, suppose that Barbie's preferences were represented by the utility function (x₁ + 4) (x₂ + 18) .Then if her income were $16, her reservation price for good 1 would be

• A)$13.60.
• B)$6.80.
• C)$9.50.
• D)$0.22.
• E)$4.40.

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Definitions:

Revenue Tariff

A duty imposed on imported goods primarily to generate income for the government rather than to restrict imports or protect domestic industries.

Venetian Glass

A type of glass made in Venice, Italy, renowned for its craftsmanship, color, and intricate designs.

Service Tax

A tax levied by the government on service providers on certain service transactions, but is actually borne by the customers.

Quotas

Limits set by governments on the amount of a specific good that can be imported or exported during a given time frame, often used as a way to regulate international trade.