In Problem 7, Lolita's Utility Function Is U(x, Y)

question 22

Multiple Choice

In Problem 7, Lolita's utility function is U(x, y) , where x is her consumption of cow feed and y is her consumption of hay. If the price of cow feed is $.10, the price of hay is $1, and her income is $2 and if Lolita chooses the combination of hay and cow feed that she likes best from among those combinations she can afford, her utility will be

• A) 0.40.
• B) 3.40.
• C) 1.90.
• D) 2.40.
• E) 1.40.

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Definitions:

Balance Sheet

A financial report that outlines a corporation's assets, liabilities, and owner's equity at a particular moment.

Interest Receivable

The amount of interest that has been earned but not yet received in cash.

Interest Revenue

Income earned by an entity through investments in interest-bearing financial instruments or accounts.

Debt Investments

Financial assets purchased with the expectation that the loan made to the issuer (such as bonds) will be paid back with interest.