In Problem 13, Where X Is Whips and Y Is

question 18

Multiple Choice

In Problem 13, where x is whips and y is leather jackets, if Kinko's utility function were U(x, y) = min{ 8x, 4x + 16y}, then if the price of whips were $20 and the price of leather jackets were $60, Kinko would demand

• A) 6 times as many whips as leather jackets.
• B) 5 times as many leather jackets as whips.
• C) 3 times as many leather jackets as whips.
• D) 4 times as many whips as leather jackets.
• E) only leather jackets.

---

Definitions:

Compounded Quarterly

Describes the frequency with which interest is added to the principal balance of a loan or deposit four times a year, increasing the total amount of interest earned or paid.

Maturity Value

The amount payable to the investor at the end of a fixed-term investment, including both the principal and the interest.

Compounded Semi-Annually

This refers to the process of calculating interest on the initial principal and the accumulated interest over two periods within a year.

11%

11% typically refers to an interest or annual rate, indicating that 11 percent of the principal amount will be paid in interest over a year.