Molly's Utility Function Is U(x, Y) = Y + 4x

question 9

Multiple Choice

Molly's utility function is U(x, y) = y + 4x^.5. She has 25 units of x and 12 units of y. If her consumption of x is reduced to 0, how many units of y would she need in order to be exactly as well off as before?

• A) 48
• B) 37
• C) 32
• D) 112
• E) None of the above.

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Definitions:

Revenue Account

An account in financial accounting used to record income generated by a company's ordinary activities.

Net Income

Represents the total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenue.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts, closing out the revenue and expense accounts.

Post-closing Trial Balance

A financial statement prepared after all adjusting and closing entries are made, ensuring the total debits equal total credits.