Janet Consumes X₁ and X₂ together in Fixed Proportions

question 26

Multiple Choice

Janet consumes x₁ and x₂ together in fixed proportions. She always consumes 2 units of x₁ for every unit x₂. One utility function that describes her preferences is

• A) U(x₁, x₂) = 2x₁x₂.
• B) U(x₁, x₂) = 2x₁ + x₂.
• C) U(x₁, x₂) = x₁ + 2x₂.
• D) U(x₁, x₂) = min{ 2x₁, x₂}.
• E) U(x₁, x₂) = min{x₁, 2x₂}.

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Definitions:

Unit Product Cost

The cost incurred to produce a single unit of product, inclusive of direct materials, direct labor, and manufacturing overhead.

Job T687

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Selling Price

The price at which a product or service is offered for sale to customers.

Unit Product Costs

The overall expense incurred to manufacture a single product unit, encompassing direct materials, direct labor, and distributed overhead costs.