Phil Rupp, from Problem 4, Has a Sister Ethel Who

question 28

Multiple Choice

Phil Rupp, from Problem 4, has a sister Ethel who has the utility function U(x, y) = min{ 5x + y, 6y}. Where x is measured on the horizontal axis and y on the vertical axis, her indifference curves consist of a

• A) vertical line segment and a horizontal line segment that meet in a kink along the line y = 5x.
• B) positively sloped line segment and a negatively sloped line segment that meet along the line x = y.
• C) horizontal line segment and a negatively sloped line segment that meet in a kink along the line x = y.
• D) vertical line segment and a horizontal line segment that meet in a kink along the line x = 5y.
• E) horizontal line segment and a positively sloped line segment that meet in a kink along the line x = 5y.

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Definitions:

Optimization Problems

Mathematical problems concerned with finding the best solution from a set of feasible solutions, given some constraints.

Solver

a tool used in software like Excel that finds an optimal value for a formula in one cell, subject to constraints on the values of other formula cells.

Manufacturing Cost

The total expense incurred in producing goods, including raw materials, labor, and overhead.

Outsourcing Decision

The process by which a company decides whether to purchase a good or service from an external provider instead of producing it internally, often influenced by factors like cost, expertise, and capacity.