Lorenzo lives on x and y alone. His utility function is U(x, y) = min{ 3x + 4y, 7y}. The prices of both goods are positive. He will
A) never buy more x than y.
B) buy equal amounts of the two goods.
C) always buy more y than x.
D) always buy more x than y.
E) More than one of the above is true.

Question

Quizplus · Accepted Answer

The Answer of Lorenzo lives on x and y alone. His utility function is U(x, y) = min{ 3x + 4y, 7y}. The prices of both goods are positive. He will
A) never buy more x than y.
B) buy equal amounts of the two goods.
C) always buy more y than x.
D) always buy more x than y.
E) More than one of the above is true.

Lorenzo Lives on X and Y Alone