Professor Nightsoils Utility Function Is U N (B N, P

question 55

Multiple Choice

Professor Nightsoils utility function is U N (B N, P N ) = and Dean Interfaces utility function is U I (B I, P I ) = , where B N and B I are the number of bromides and P N and P I are the number of platitudes consumed by Nightsoil and Interface respectively. If Nightsoils initial endowment is 5 bromides and 20 platitudes and if Interfaces initial endowment is 3 bromides and 20 platitudes, then at any Pareto efficient allocation in which both consume positive amounts of both goods,

• A) Nightsoil consumes the same ratio of bromides to platitudes as Interface.
• B) Interface consumes 8 platitudes.
• C) Interface consumes 4 bromides.
• D) .Interface consumes 4 bromides.
• E) Interface consumes 4 bromides

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Definitions:

CVP Graph

A visual representation of the Cost-Volume-Profit analysis that illustrates the relationships between costs, volume, and profit.

Total Fixed Expenses

Total fixed expenses refer to the sum of all costs that do not change with the level of production or sales over a certain period.

Total Variable Expenses

The sum of all costs that vary directly with the level of production or sales volume over a specific period.

Degree of Operating Leverage

A financial metric that measures the sensitivity of a company's operating income to its sales volume.