If the Utility Function (U)between Bananas (B)and Jam (J)can Be

question 9

Multiple Choice

If the utility function (U) between bananas (B) and jam (J) can be represented as U(B,J) = 3ln(B) +4ln(J) ,what is the marginal rate of substitution (MRS) between bananas and jam?

• A) 4B.
• B) -3J/(4B).
• C) 4/(3J).
• D) 3B/J.

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Definitions:

Capital Budgeting

It is the process of evaluating and selecting long-term investments that are in line with the goal of shareholders' wealth maximization.

Simple Rate of Return

A financial metric calculating the increase in cash flow an investment generates, compared to its initial cost, not accounting for time value of money.

Depreciation Expense

The charged amount representing the usage of fixed assets attributed to business operations over a period.

Incremental Expenses

Incremental expenses are the additional costs incurred when a company increases its production or activities beyond its current levels.