where x is whips and y is leather jackets, if Kinko's utility function were U(x, y)=min{7x, 5x + 10y}, then if the price of whips were $20 and the price of leather jackets were $20, Kinko would demand
A)6 times as many leather jackets as whips.
B)4 times as many leather jackets as whips.
C)7 times as many whips as leather jackets.
D)5 times as many whips as leather jackets.
E)only leather jackets.

Question

Quizplus · Accepted Answer

Kinko's utility function is U(x, y) = min{7x, 5x + 10y}. To maximize utility, the two expressions inside the min function should be equal: 7x = 5x + 10y. Solving this gives 2x = 10y, or x = 5y, meaning Kinko demands 5 times as many whips as leather jackets.

Where X Is Whips and Y Is Leather Jackets, If