Phil Rupp's Sister Ethel Has the Utility Function U(x, Y)=

question 31

Multiple Choice

Phil Rupp's sister Ethel has the utility function U(x, y) = min{5x + y, 6y}.Where x is measured on the horizontal axis and y on the vertical axis, her indifference curves consist of a

• A)horizontal line segment and a negatively sloped line segment which meet in a kink along the line x = y.
• B)vertical line segment and a horizontal line segment which meet in a kink along the line y = 5x.
• C)positively sloped line segment and a negatively sloped line segment which meet along the line x = y.
• D)vertical line segment and a horizontal line segment which meet in a kink along the line x = 5y.
• E)horizontal line segment and a positively sloped line segment which meet in a kink along the line x = 5y.

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Definitions:

Diversification Objective

A strategy aimed at reducing risk by allocating investments among various financial instruments, industries, or other categories.

Fluctuations In Income

Variations or changes in the amount of money received over a period, which can affect purchasing power and economic stability.

Earthquake Insurance

A type of property insurance policy that covers damage to buildings and personal property caused by seismic activities.

Utility Function

An equation that assigns a level of utility or satisfaction to each bundle of goods, allowing for comparisons of consumer preferences.