Mike's Utility Function Is U(c, D, H) = 8c

question 39

Multiple Choice

Mike's utility function is U(c, d, h) = 8c + 12d - d² - 6h, where d is the number of hours per day that he spends driving around, h is the average number of hours per day spent driving around by other citizens of his town, and c is the amount of money he has to spend on other things than gasoline and auto repairs. There are 1,001 identical citizens in Mike's home town. Mike's expenses for gasoline and auto repairs amount to $.50 per hour for the time he spends driving. If Mike believes that his amount of driving won't affect the amount that others drive, how many hours per day will he choose to drive?

• A) 4
• B) 8
• C) 2
• D) 6
• E) 1

Understand the impact of purchasing, returning, and paying for merchandise on financial statements.

Comprehend the recording of transactions under the perpetual inventory system.

Identify the effects of errors in recording transactions on net income and total assets or liabilities.

Grasp the process of taking discounts on purchases and their effect on financial accounts.

---

Definitions:

Foreign Producers

Companies or individuals that manufacture goods or provide services in one country for consumption in another.

Leather Shoes

are footwear made from the hide of animals, known for their durability, flexibility, and aesthetic appeal.

Dumping

The act of exporting a product at a price lower than the price it is sold at within the exporting country.

Auto Accident

A collision involving one or more vehicles, which can result in damage to the vehicles and injuries to the occupants or pedestrians.