The Figure Below Shows a Consumer Maximizing Utility at Two

question 33

Multiple Choice

The figure below shows a consumer maximizing utility at two different prices (the left panel) and the consumer's demand for good X at the same two prices of good X (the right panel) .The price of good Y is $14.At point r on indifference curve I,the MRS is _____ and _____ units of good X are purchased.

• A)2; 40
• B)2; 45
• C)4; 40
• D)4; 45
• E)5; 45

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Definitions:

Optimal Size

Optimal size is the most efficient scale of operation for a firm where it can minimize its cost and maximize its profitability.

Synergy

The concept that the combined value and performance of two companies will be greater than the sum of the separate individual parts.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

Firm Value

The total market value of a company's equity plus its debt, reflecting the overall worth of the company.