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Question 3 (10 points) Saved [10 marks] For the following question, You get 2 marks for choosing the correct answer. . You get up to
Question 3 (10 points) Saved [10 marks] For the following question, You get 2 marks for choosing the correct answer. . You get up to 8 marks for the detailed solution. The utility function of a consumer is given by U (x, m) = 100x - + y, where x is his consumption of earrings and y is money left over to spend on other stuff. If she has $10,000 to spend on earrings and other stuff and if the price of earrings rises from $40 to $70, then her net consumer's surplus (a) falls by 2,800. (b) falls by 1,350. (c) falls by 700. (d) increases by 1,350. (e) increase by 2,800
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