Individuals Derive Utility from Picnics,p,and Kayak Trips,k

question 63

Multiple Choice

Individuals derive utility from picnics,p,and kayak trips,k.Assuming that an individual's utility is U(p,k) = k^0.5p^0.5 and income is $100,what is the marginal rate of substitution (MRS) between picnics and kayak trips?

• A) MRS = 1.
• B) MRS = -1.
• C) MRS = -
• D) There is no substitution because picnics and kayak trips are perfect complements.

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Definitions:

Financing Activity

Transactions and events where cash is raised for investing in the business or repaying funds borrowed by the company, supplied through equity or debt.

Income Ratio

A metric used to evaluate the performance of a company by comparing income to other financial figures, often referred to as a profitability ratio.

Operating Activities

The day-to-day actions that are involved in running a business and generating revenue, such as selling products or services.