Ambrose's Brother Patrick Has a Utility Function U(x₁, X₂) =

question 12

Multiple Choice

Ambrose's brother Patrick has a utility function U(x₁, x₂) = 16x ₁ + x₂. His income is $82, the price of good 1 (nuts) is $2, and the price of good 2 (berries) is $1. How many units of nuts will Patrick demand?

• A) 26
• B) 12
• C) 14
• D) 16
• E) 30

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Definitions:

Straight-Line Method

A method of calculating depreciation of an asset that allocates an equal portion of the asset's cost to each year of its useful life.

Discount on Bonds Payable

The difference when bonds are issued for less than their face value.

Carrying Value

The book value of assets and liabilities reported in the financial statements, considering depreciation or amortization.

Bond Payable

A long-term liability account that records the amounts owed to bondholders by the issuer.