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Fanny Consumes X and Y

Question 36

Multiple Choice

Fanny consumes x and y.The price of x is $9 and the price of y is $9.Fanny's only source of income is her endowment of 12 units of x and 12 units of y which she can buy or sell at the going prices.She plans to consume 13 units of x and 11 units of y.If the prices change to $12 for x and $12 for y,


A) she is better off.
B) she is worse off.
C) she is neither better off nor worse off.
D) she is better off if she has nonconvex preferences.
E) We can't tell whether she is better off or worse off unless we know her utility function.

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