Henri's Utility Function Is Min{x, 5y + 2z}

question 37

Multiple Choice

Henri's utility function is min{x, 5y + 2z}. The price of x is $1, the price of y is $15, and the price of z is $7. Henri's income is $44. How many units of x does Henri demand?

• A) 9.78
• B) 11
• C) 5
• D) 3
• E) None of the above.

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Definitions:

Current Liabilities

Short-term financial obligations that are due within one year or within a normal operating cycle, such as accounts payable, wages payable, and short-term loans.

Company's Liquidity

The ability of a company to meet its short-term debt obligations, often assessed through liquidity ratios like the current ratio and quick ratio.

Times Interest Earned

A ratio measuring a company's ability to meet its interest obligations from its operating income.

Interest Expense

The cost incurred by an entity for borrowed funds over a period of time, typically expressed as an annual rate.