Figure: Consumer Equilibrium I the Figure Shows Three of Owen's

question 264

Multiple Choice

Figure: Consumer Equilibrium I The figure shows three of Owen's indifference curves for pizza and soda per week.Owen has $180 per month to spend on the two goods, and the price of a pizza is $20 and the price of a soda is
$1) 50. (Figure: Consumer Equilibrium I) Look at the figure Consumer Equilibrium I.If in equilibrium, Owen receives marginal utility of 10 utils from the last pizza he consumes, his marginal utility from the last soda must be utils.

• A)0.50
• B)0.75
• C)1.5
• D)13.3

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Definitions:

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, often represented by the yield on government bonds like U.S. Treasury notes.

Expected Rate

The rate of return anticipated on an investment or asset based on historical data or specified models.

CAPM

Capital Asset Pricing Model, a model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Risk Premium

An expected return in excess of that on risk-free securities. The premium provides compensation for the risk of an investment.