A Utility Function

question 12

Multiple Choice

A utility function

• A) needs to measure the absolute level of happiness.
• B) needs to measure relative amounts of happiness for a single individual.
• C) helps compare the relative happiness of two separate consumers.
• D) is most useful if it can be influenced by others.

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Definitions:

Present Value Table

A table that provides factors for calculating the present value of future cash flows based on a certain discount rate over a number of periods.

Interest

The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.