where x is whips and y is leather jackets, if Kinko's utility function were U(x, y)= min{5x, 3x + 6y}, then if the price of whips were $20 and the price of leather jackets were $20, Kinko would demand
A)3 times as many whips as leather jackets.
B)4 times as many leather jackets as whips.
C)2 times as many leather jackets as whips.
D)5 times as many whips as leather jackets.
E)only leather jackets.

Question

Quizplus · Accepted Answer

Kinko's utility function is based on the minimum of {5x, 3x + 6y}. To maximize utility, Kinko would balance the two expressions, making 5x = 3x + 6y. Solving for x in terms of y (or vice versa) shows that Kinko would demand 3 times as many whips as leather jackets to equalize the utility from both goods, given their prices are the same.

Where X Is Whips and Y Is Leather Jackets, If