=+B. Suppose your tastes were captured by the utility function u(x1 , x2 ) 5 x1 0.5x2

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=+B. Suppose your tastes were captured by the utility function u(x1

, x2

) 5 x1 0.5x2 0.5, where x1 stands for miles driven and x2 stands for other consumption. Suppose you have $600 per month of discretionary income to devote to your transportation and other consumption needs and that the monthly payment on a gas guzzler is $200. Furthermore, suppose the initial price of gasoline is $0.10 per mile in the fuelefficient car and $0.20 per mile in the gas guzzler.

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