For the Cobb-Douglas Utility Function with Two Goods,the Sum of the Own

question 11

Multiple Choice

For the Cobb-Douglas utility function with two goods,the sum of the own price elasticities of demand must be:

• A)0.
• B)-1.
• C)-2.
• D)any number between 0 and -4.

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Definitions:

Net Operating Income

The total profit of a company after operating expenses are subtracted from operating revenues.

Margin

Describes profit as the difference between sales and the costs of goods sold, often expressed as a percentage of sales.

Return on Investment

A measure of the profitability of an investment, calculated as the net gain from an investment divided by the cost of the investment.

Average Operating Assets

The average value of the assets utilized to generate revenue during a specific period, often calculated by averaging the beginning and ending asset values for the period.