Suppose That There Are Two Goods, X and Y

question 11

Multiple Choice

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

• A) (30 - P) / P
• B) (20 - P) / P
• C) (2 - P) / P
• D) 2P

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Definitions:

Revenue Price Variance

The difference between the actual revenue received from selling a product and the expected revenue, based on standard pricing.

Revenue Volume Variance

The difference between the planned and actual units sold multiplied by the planned sales price.

Total Revenue Variance

The difference between the actual total revenue earned and the expected total revenue in a period.

Direct Materials Price Variance

The difference between the actual cost of direct materials and the standard cost, multiplied by the quantity purchased.