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Carl Has the Utility Function U(x,y)= X2 + Y

Question 3

Multiple Choice

Carl has the utility function U(x,y) = x2 + y. He consumes 4 units of x and 10 units of y. If both goods are normal goods and if the price of x increases, then:


A) Carl will reduce his consumption of x to zero.
B) Carl will consume more x.
C) Carl will reduce his consumption of x to a positive amount.
D) Carl will consume the same amount of x.

Correct Answer:

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