Janet Consumes X₁ and X₂ Together in Fixed Proportions

question 49

Multiple Choice

Janet consumes x₁ and x₂ together in fixed proportions.She always consumes 2 units of x₁ for every unit x₂.One utility function that describes her preferences is

• A)U(x₁, x₂)=2x₁x₂.
• B)U(x₁, x₂)=2x₁ = x₂.
• C)U(x₁, x₂)=x₁ + 2x₂.
• D)U(x₁, x₂)=min{2x₁, x₂}.
• E)U(x₁, x₂)=min{x₁, 2x₂}.

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Definitions:

Flexible Budget

A budget that adjusts or varies with changes in volume or activity, allowing for more accurate forecasting and planning.

Production Budget

An estimated financial plan for the production process, detailing costs and resources needed to meet production goals.

Sales Budget

An estimate of the expected sales revenue for a certain period of time, often used as a plan for business operations and resource allocation.

Capital Expenditures Budget

A budget that outlines projected spending on fixed assets over a period, including purchases of property, equipment, and other long-term investments.