What Is the Maximum Amount of Good Y That Can

question 2

Multiple Choice

What is the maximum amount of good Y that can be purchased if X and Y are the only two goods available for purchase and P_x = $5,P_y = $10,X = 20,and M = 500?

• A) 40
• B) 25
• C) 50
• D) 75

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Definitions:

Net Profits

The amount of money left over after all expenses, taxes, and deductions are subtracted from a company's total revenue.

Compensating Balance

A minimum account balance that a company agrees to maintain in a bank in return for banking services.

Business Loan

A loan specifically intended for business purposes, providing the necessary capital for start-up or expansion.

Prime Rate

The interest rate that commercial banks charge their most credit-worthy customers, often used as a reference point for various types of loans.