In Problem 6, the only quantities of good 1 that Barbie can buy are 1 unit or zero units. For x1 equal to zero or 1 and for all positive values of x2, suppose that Barbie's preferences were represented by the utility function (x1 + 6) (x2 + 4) . Then if her income were $16, her reservation price for good 1 would be
A) $2.86.
B) $2.50.
C) $5.71.
D) $1.50.
E) $.57.
Correct Answer:
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