If Jane's utility function is given by U = xy:
A)Jane prefers bundle (1,3)to bundle (2,5).
B)Jane is indifferent between bundle (2,2)and bundle (2,1).
C)Jane prefers bundle (2,2)to bundle (3,3).
D)Jane is indifferent between bundle (1,2)and bundle (2,1).

Question

Quizplus · Accepted Answer

Jane's utility function U = xy calculates utility based on the product of x and y. For D, both bundles (1,2) and (2,1) give a utility of 2 (1*2 = 2 and 2*1 = 2), indicating indifference.

If Jane's Utility Function Is Given by U = Xy