Brenda's Utility Function for Regular-Flavored Toothpaste (R) and Mint-Flavored Toothpaste

question 105

Multiple Choice

Brenda's utility function for regular-flavored toothpaste (R) and mint-flavored toothpaste (M) is given by U = 2R + 4M. Which of the following statements is TRUE?

• A) MRS_MR = 2M/R.
• B) Brenda's indifference curves are vertical.
• C) Brenda's indifference curves are horizontal.
• D) Brenda is willing to give up two tubes of regular-flavored toothpaste for one tube of mint-flavored toothpaste.

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Definitions:

Average Operating Assets

This refers to the average value of the assets used in operations over a certain period, which can indicate the efficiency of asset use in generating income.

Sales

The revenue generated from the selling of goods or services by a company or an enterprise to its customers.

Turnover

Sales divided by average operating assets.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, expressed as a percentage.