Consider the Utility Function U = 5x +3y², Which Has

question 21

Multiple Choice

Consider the utility function U = 5x +3y², which has MU_x = 5 and MU_y = 6y. The indifference curves for this utility function

• A) will have a diminishing marginal rate of substitution of x for y as x increases.
• B) will have a constant marginal rate of substitution of x for y as x increases.
• C) will have an increasing marginal rate of substitution of x for y as x increases.
• D) will be straight lines.

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Definitions:

ROI

Return on Investment; a performance measure used to evaluate the efficiency or profitability of an investment or to compare the efficiency of several different investments.

Profit Objective

Profit objective refers to a specific goal set by a business or project concerning the amount of profit it aims to generate within a given timeframe.

Price-Setting Process

The method by which a company determines the selling price of its products or services, often involving cost analysis, market research, and competitive strategy.

Estimating Demand

The process of forecasting the potential market demand for a product or service based on various factors like market trends, consumer behavior, and historical data.