The Utility Function for Raj Is U = Min{4M, T}

question 11

Multiple Choice

The utility function for Raj is U = min{4M, T}, where M is pints of milk and T is cans of tuna. Raj has $90 to spend on tuna (priced at $2 per can) and milk (priced at $1 per pint) . What is Raj's utility-maximizing consumption bundle?

• A) M = 30 and T = 30
• B) M = 40 and T = 25
• C) M = 10 and T = 40
• D) M = 15 and T = 65

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Definitions:

Outstanding Balance

The amount of money owed that has not yet been paid by the debtor.

Savings Account

A bank account that earns interest and is typically used for holding money that is not intended for daily expenses.

Accumulated Amount

The total sum including the principal and the compounded interest over a period.

End-Of-Quarter Payments

Payments that are made at the conclusion of a fiscal quarter, often related to financial obligations such as loans or leases.