Stewie Enjoys Watching DVDs and Listening to His IPod

question 8

Multiple Choice

Stewie enjoys watching DVDs and listening to his iPod.Suppose his utility function is given by U(D,I) = 3D + 4(D × I) ,where D is the number of hours he spends watching DVDs and I is the number of hours he spends listening to his iPod.Which of the following combinations will provide Stewie with the greatest amount of satisfaction?

• A) 4 hours of watching DVDs and 8 hours of listening to his iPod
• B) 6 hours of watching DVDs and 6 hours of listening to his iPod
• C) 2 hours of watching DVDs and 10 hours of listening to his iPod
• D) 8 hours of watching DVDs and 6 hours of listening to his iPod

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Definitions:

Cash Disbursement

The payment of money from a fund or account, typically involving the transfer of cash to individuals or companies for services rendered or goods purchased.

Operating Cycle

The period from purchasing inventory to collecting cash from the sale of that inventory.

Accounts Receivable Financing

A type of financing arrangement in which a company uses its receivables as collateral for a loan, effectively selling its right to future payments in exchange for immediate cash.

Factored Receivables Financing

A financial transaction in which a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.