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

question 6

Multiple Choice

Phil Rupp, from Problem 4, has a sister Ethel who has the utility function U(x, y) = min{ 3x + y, 4y}. Where x is measured on the horizontal axis and y on the vertical axis, her indifference curves consist of a

• A) positively sloped line segment and a negatively sloped line segment that meet along the line x = y.
• B) vertical line segment and a horizontal line segment that meet in a kink along the line y = 3x.
• 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 = 3y.
• E) horizontal line segment and a positively sloped line segment that meet in a kink along the line x = 3y.

Understand how to calculate the contribution margin per unit sold.

Calculate total variable costs at a given level of activity within the relevant range.

Identify and calculate differential, opportunity, and sunk costs in decision-making scenarios.

Estimate incremental costs associated with a slight increase in production.

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Definitions:

Instrument

A legal document that formalizes an agreement or right, often used in financial and property transactions.

Maker

A person obligated as the payor on a promissory note. See also comaker.

Bearer Note

A type of fixed-income security that is not registered by the issuer, allowing any holder in possession to collect on it.

Draft

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