Jane's Utility Function Is U(x,y)= 2xy

question 60

Multiple Choice

Jane's utility function is U(x,y) = 2xy. She has 2 units of good x and 4 units of good y. Tim's utility function is U(x,y) = 5x + 2y. He has 4 units of good x and 1 unit of good y. We can conclude that:

• A)each prefers their own bundle to the other's bundle.
• B)Jane prefers Tim's bundle to her own, but Tim prefers his own bundle to Jane's.
• C)each prefers the other's bundle to their own.
• D)Tim prefers Jane's bundle to his own, but Jane prefers her own bundle to Tim's.

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Definitions:

Cash Operating Expenses

Costs directly associated with the operation of a business that require cash payment, excluding non-cash expenses such as depreciation.

Simple Rate

A term not commonly used in a standard context, possibly referring to a basic interest rate in financial terms.

Salvage Value

The estimated resale value of an asset at the end of its useful life, used in calculating depreciation expenses.

Annual Depreciation

The portion of the cost of a fixed asset that is expensed each year over its useful life.