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George Has $49 Which He Decides to Spend on X

Question 3

Multiple Choice

George has $49 which he decides to spend on x and y. Commodity x costs $5 per unit and commodity y costs $11 per unit. He has the utility function U(x, y) = 3x2 + 6y2 and he can purchase fractional units of x and y. George will choose


A) only y.
B) some of each commodity but more x than y.
C) only x.
D) some of each commodity but more y than x.
E) equal amounts of the two commodities.

Correct Answer:

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