Holly consumes x and y. The price of x is 4 and the price of y is 4. Holly\'s on

(c) She is neither better o nor worse off-answer---------correct--------100% sure.

ID: 1098832 • Letter: H

Question

Holly consumes x and y. The price of x is 4 and the price of y is 4. Holly's only source of

income is her endowment of 6 units of x and 6 units of y which she can buy or sell at the going

prices. She plans to consume 7 units of x and 5 units of y. If the prices change to 7 for x and 7 for

y; which of the following is true? (explain or show work)

(a) She is better o.

(b) She is worse o.

(d) We can't tell whether she is better o or worse o unless we know her utility function.

(e) She is better o if she has non-convex preferences

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