Suppose Your Utility Function for Food (F) and Clothing (C)

question 47

Multiple Choice

Suppose your utility function for food (F) and clothing (C) is u(F,C) = F + 4C. If you reduce your clothing consumption by 2 units, how much do you have to increase your food consumption in order to maintain the same utility level?

• A) 2 units
• B) 4 units
• C) 6 units
• D) 8 units

---

Definitions:

Euros

The official currency used by the countries of the Eurozone.

Portfolio Investment

In international finance, investment in the securities of a foreign company or government.

French Company

A business entity that is registered and operates within France or is formed under French law.

Indirect Quote

An exchange rate expressed as the amount of foreign currency one unit of domestic currency can buy.