Harry Mazzola Has the Utility Function U(x₁, X₂)= Min{x₁

question 7

Multiple Choice

Harry Mazzola has the utility function U(x₁, x₂) = min{x₁ + 2x₂, 2x₁ + x₂}.He has $40 to spend on corn chips and french fries.If the price of corn chips is $1 per unit and the price of french fries is $4, then Harry will

• A)consume at least as many french fries as corn chips but might consume both.
• B)consume at least as many corn chips as french fries but might consume both.
• C)definitely spend all of his income on corn chips.
• D)definitely spend all of his income on french fries.
• E)consume equal amounts of french fries and corn chips.

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Definitions:

Annual Interest Rate

The percentage increase in money lent or invested over a one-year period, expressed as a percentage of the principal.

Cash Conversion Cycle

A metric that measures the time between when a company pays for its inventory and when it receives cash from selling it.

Inventory Turnover

A ratio indicating how many times a company’s inventory is sold and replaced over a specific period.

ACP

Average Collection Period, indicating the average number of days it takes for a company to collect its receivables.