A Consumer Has Preferences Represented by the Utility Function U(x₁

question 19

True/False

A consumer has preferences represented by the utility function U(x₁, x₂) = 10(x²₁ + 2x₁x₂ + x²₂) - 50. For this consumer, goods 1 and 2 are perfect substitutes.

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Definitions:

Identified to the Contract

Refers to goods that have been designated as the subject matter of a sales or service contract.

Insurable Interest

A stake in the preservation of a person or property that is sufficiently substantial to justify purchasing insurance.

Risk Exposure

The degree of vulnerability to potential financial loss in business operations or investments.

Damage or Destruction

The physical harm or ruin caused to property, environments, or items, which can impact their value, function, or usability.