Georgina consumes only grapefruits and pineapples. Her utility function is U(x: y) = x^2 y^8: where x is the number

Georgina consumes only grapefruits and pineapples. Her utility function is U(x: y) = x^2 y^8: where x is the number of grapefruits consumed and y is the number of pineapples consumed. Georgina's income is 105, and the prices of grapefruits and pineapples are 1 and 3, respectively. How many grapefruits will she consume?

(a) 10.50

(b)7

(c) 63

(d) 21

(e) None of the above. Mary has homothetic preferences. When her income was $1,000, she bought 40 books and 60 newspapers. When her income increased to $1, 500 and prices did not change, she bought:

(a) 60 books and 90 newspapers.

(b) 80 books and 120 newspapers.

(c) 60 books and 60 newspapers.

(d) 40 books and 120 newspapers.

(e) There is not enough information for us to determine what she would buy.


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