Suppose Andy has a utility function of U (x, y) = 2x + y and a wealth level of 12. The price of good X is 2 and the price of good Y is 1. Which of the following statement is optimal? Andy will not spend all 12 dollars. Andy will necessarily spend all the wealth on the consumption of Good X. All other options are incorrect. There are multiple optimal market baskets. Andy will necessarily spend all the wealth on the consumption of Good Y.

Suppose Andy has a utility function of U (x, y) = 2x + y and a wealth level of 12. The price of good X is 2 and the price of good Y is 1. Which of the following statement is optimal? Andy will not spend all 12 dollars. Andy will necessarily spend all the wealth on the consumption of Good X. All other options are incorrect. There are multiple optimal market baskets. Andy will necessarily spend all the wealth on the consumption of Good Y.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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