Katie Kwasi's utility function is U(x₁, x₂) = 2(ln x₁) + x₂. Given her current income and the current relative prices, she consumes 10 units of x₁ and 15 units of x₂. If her income doubles, while prices stay constant, how many units of x₁ will she consume after the change in income? A) 20 B) 18 C) 10 D) 5 E) There is not enough information to determine how many.

Question

Quizplus · Accepted Answer

The Answer of Katie Kwasi's utility function is U(x₁, x₂) = 2(ln x₁) + x₂. Given her current income and the current relative prices, she consumes 10 units of x₁ and 15 units of x₂. If her income doubles, while prices stay constant, how many units of x₁ will she consume after the change in income? A) 20 B) 18 C) 10 D) 5 E) There is not enough information to determine how many.

Katie Kwasi's Utility Function Is U(x1, X2) = 2(ln X1)

Katie Kwasi's Utility Function Is U(x₁, X₂) = 2(ln X₁)