Rod Cares About the Number of Cars He Has and the Amount

question 17

Multiple Choice

Rod cares about the number of cars he has and the amount of money he has to spend on other stuff.The only possibilities of interest for Rod are having 0, 1, or 2 cars.Where x is the number of cars he has and y is the money he has per year for other stuff, Rod's utility is U(0, y) = y^.5, U(1, y) = (15/14) y^.5, and U(2, y) = (10/9) y^.5.Rod's income is $25,000 a year.It would cost Rod $2,500 a year to have 1 car and $3,500 a year to have 2 cars.How many cars will he choose?

• A)0
• B)1
• C)2
• D)He is indifferent between buying 1 and buying 2 cars.
• E)He is indifferent between buying 2 and buying 3 cars.

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Definitions:

Uterine Lining

The inner layer of the uterus, which thickens during the menstrual cycle in preparation for possible implantation of an embryo.

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The participation of the father in the upbringing and care of his children, which can positively impact the child's development and family dynamics.

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Often referred to as emergency contraception, it is a method used to prevent pregnancy after unprotected sex has occurred.