Elmer's utility function is U(x, y) = min{x, y²}. If the price of x is $10 and the price of y is $15 and if Elmer chooses to consume 4 units of y, what must his income be? A) $220 B) $100 C) $320 D) $440 E) There is not enough information to determine his income.

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Quizplus · Accepted Answer

Elmer's income must be at least $220 because he must be able to afford to buy 4 units of y at $15 per unit.

Elmer's Utility Function Is U(x, Y) = Min{x, Y2}

Elmer's Utility Function Is U(x, Y) = Min{x, Y²}