(Table: Utility from Milk and Honey)Use Table: Utility from Milk

question 114

Multiple Choice

(Table: Utility from Milk and Honey) Use Table: Utility from Milk and Honey.The price of milk is $2,and the price of honey is $4.If Max's income is $16,he buys _____ bottle(s) of milk and _____ jar(s) of honey.

• A)1;1
• B)4;2
• C)5;4
• D)6;0

Understand the correlation between saving, investment, and the standard of living.

Familiarize with the function of the financial system in coordinating investment and saving.

Understand the concept of credit risk and its implications on bond investments.

Explain the relationship between private saving, government deficit, and investment in a closed economy.

---

Definitions:

Tax Deductible

Expenses that can be subtracted from gross income to reduce taxable income, effectively lowering the overall tax liability.

Ordinary Income

Income earned from basic sources such as wages, salaries, commissions, and interest, subject to standard tax rates.

Defined Contribution Plan

A type of retirement plan where the amount contributed is specified, but the future benefit amount is not guaranteed, depending on investment returns.

Risk-free Return

Risk-free return refers to the theoretical return on investment with zero risk, representing the return on the safest assets.