Suppose That There Are Two Goods, X and Y

question 124

Essay

Suppose that there are two goods, X and Y. The utility function is U = XY + 2Y. The price of X is $5, and the price of Y is P. Income is $60. Derive the demand for Y as a function of P.

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Definitions:

Plowback Ratio

The proportion of earnings that a company reinvests into its business rather than distributing to shareholders as dividends, indicating its growth strategy.

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholder's equity, indicating how well a company uses investments to generate earnings growth.

Plowback Ratio

The proportion of earnings retained by a company after dividends have been paid, often reinvested in the business for growth.

P/E Ratio

The P/E Ratio (Price-to-Earnings Ratio) is a metric used to value a company by dividing its current share price by its earnings per share, indicating how much investors are willing to pay for each dollar of earnings.