1. A consumer has U = X^0.5Y^0.5 for a utility function. If she has income of $100, the price of X is $5, and the price of Y is $10, this consumer will buy _ units of X and _ units of Y to maximize utility.

Select an answer and submit.

a. 5; 10

b. 10; 5

c. 20; 10

d. 10; 20

2. Julie spends all of her income on gasoline and pizza. Gasoline (X) costs $4 per gallon and pizza (Y) costs $2 per slice. When Julie's income is $50 per week, she purchases 5 gallons of gasoline and 15 slices of pizza. Which of the following could be her utility function?

Select an answer and submit.

a. U = X^0.5Y^0.5

b. U = X^0.4Y^0.6

c. U = X^0.2Y^0.8

d. U = X^0.9Y^0.1

3. Laurie likes good X three times as much as good Y. Good X has a price of $1, while good Y has a price of $2. If she has $18 to spend, what combination of X and Y will she choose to consume?

Select an answer and submit.

a. 12 units of X, 3 units of Y

b. 5.5 units of X, 17.5 units of Y

c. 13.5 units of X, 2.25 units of Y

d. 6 units of X, 6 units of Y

4. William likes Apples five times more than oranges. The price of oranges is half the price of apples. Given this information, what is the ratio in which William will want to consume apples and oranges?

Select an answer and submit.

a. cannot be determined without knowing Income

b. 10 apples for every 1 orange

c. 2.5 apples for every 1 orange

d. 2 oranges for every 1 apple