1. Suppose the price of good a is $6 and the price of good y is $24. Also, suppose a consumer's preferences can be represented by the utility function U(x,y) = artyi. Which of the following baskets could be, for the right income, a utility maximizing bundle? (a) x = 12, y = 3 (b) : =4, y = 12 (c) x = 21, y = 7 (d) : = 6, y = 32 (e) There is not enough information to answer this quesetion. 2. Mollie's preferences over goods r and y are represented by U(x,y) = ry + 10(x + y). The price of ar is $20, the price of y is $10, and Mollie has a total of $60 to spend on these goods. What is Mollie' utility maximizing bundle given her budget constraint? (a) : = 0 and y = 6 (b) x = 1 and y = 4 (c) = = 3 and y = 0 (d) r = 2 and y = 2 3. George eats sandwiches for lunch. For every 2 slices of bread (B) he requires 3 slices of turkey (7). An additional slice of bread without any additional turkey does not make him better or worse off. Similarly, an additional slice of turkey without any additional bread does not make him any better or worse off. George has $14 to spend on bread and turkey. Each slice of bread costs 50 cents, and each slice of turkey costs 25 cents. His utility function is. and his optimal bundle is (a) U(B, T) = min{2B, 37); 14 slices of bread and 21 slices of turkey (b) U(B, T) = min{3B, 27); 14 slices of bread and 21 slices of turkey (c) U(B, T) = min{28, 37); 16 slices of bread and 24 slices of turkey (d) U(B, T) = min {3B, 27); 16 slices of bread and 24 slices of turkey 4. Andre considers red pens (R) and black pens (B) to be perfect substitutes. He always requires 2 red pens to be willing to give up 3 black pens. Andre's budget constraint can be written as 15 = R + - B. His utility function is , and his optimal bundle is (a) U( R. B) = 2R + 38; 15 red pens and 0 black pens (b) U(R. B) = 2R+ 38; 0 red pens and 30 black pens (c) U(R, B) = 3R + 28; 15 red pens and 0 black pens (d) U( R, B) = 3R + 28; 0 red pens and 30 black pens