In Problem 3, Professor Nightsoil's Utility Function Is U_N(B_N, P_N)

question 13

Multiple Choice

In Problem 3, Professor Nightsoil's utility function is U_N(B_N, P_N) and Dean Interface's utility function is U_I(B_I, P_I) . If Nightsoil's initial endowment is 7 bromides and 5 platitudes and if Interface's initial endowment is 8 bromides and 10 platitudes, then at any Pareto efficient allocation where both persons consume positive amounts of both goods,

• A) Interface consumes 1 bromide.
• B) Interface consumes 3 platitudes.
• C) Nightsoil consumes the same ratio of bromides to platitudes as Interface.
• D) Interface consumes 7.50 bromides.
• E) Interface consumes 2 platitudes.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health of the company.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument to present value, helping to determine its worth.

Intangible Benefits

Benefits that cannot be physically touched or quantified easily, such as brand reputation or customer loyalty.

Required Rate Of Return

The minimum percentage return an investor expects to achieve by investing in a particular asset or project.