Question: Ike's utility function is U ( x, y )= 25 xy . He has 12 units of good x and 8 units of good y.

Ike's utility function isU(x, y)= 25xy. He has 12 units of good x and 8 units of good y. Bens utility function for the same two goods isU(x, y)= 4x+ 4y. ben has 9 units of x and 13 units of y.

a.Since they have different preferences, there is not enough information to determine who envies whom.

b.Ike prefers bens bundle to his own bundle but ben prefers his own bundle to Ike's.

c.Nether prefer the others bundle to their own.

d.Ben prefers Ike's bundle to his own but Ike prefers his own bundle to Ben's.

e.Each prefers the others bundle to their own.

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