The only quantities of good 1 that Irene can buy are 1 unit or 0 units. For all positive values of x2, Irene's preferences are represented by the utility function (x1 + 10) (x2 + 2) . If her income is $8 and the price of good 2 is $1, then Irene's reservation price for good 1 is
A) $1.82.
B) $1.50.
C) $.91.
D) $5.
E) $.10.
Correct Answer:
Verified
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