Kate has the utility function U(x, y) = 100*x - \frac{x^2 }{2} + y where x is her consumption of earplugs and y is money left over to spend on other stuff. If she has $10,000 to spend on earplugs and other stuff and if the price of earplugs rises from $50 to $7O, then her net consumer's surplus Select one: a. falls by 2,800. b. falls by 800. c. falls by 600. d. increases by 400. e. increases by 1,600.

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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Chapter1: Making Economics Decisions
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Kate has the utility function U(x, y) = 100*x -
\frac{x^2 }{2} + y where x is her consumption
of earplugs and y is money left over to spend
on other stuff. If she has $10,000 to spend on
earplugs and other stuff and if the price of
earplugs rises from $50 to $70, then her net
consumer's surplus
Select one:
a. falls by 2,800.
b. falls by 800.
c. falls by 600.
d. increases by 400.
e. increases by 1,600.
Transcribed Image Text:Kate has the utility function U(x, y) = 100*x - \frac{x^2 }{2} + y where x is her consumption of earplugs and y is money left over to spend on other stuff. If she has $10,000 to spend on earplugs and other stuff and if the price of earplugs rises from $50 to $70, then her net consumer's surplus Select one: a. falls by 2,800. b. falls by 800. c. falls by 600. d. increases by 400. e. increases by 1,600.
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