Justin Consumes Goods X and Y and Has a Utility

question 61

Multiple Choice

Justin consumes goods x and y and has a utility function U(x, y) =x² + y.The price per unit of x is p_x and the price per unit of y is p_y.He has enough money so that he can afford at least 1 unit of either good.When he chooses his best affordable bundle,

• A)his budget line must be tangent to the indifference curve passing through this bundle.
• B)he must consume only x.
• C)he must consume only y if p²_x / p_y exceeds his income.
• D)he must consume some of each good if p_x =p_y.
• E)he must consume some of each good if p_y = p_x /2.

Grasp the concept and importance of zero-based budgeting in financial planning.

Learn the implications of production and labor budgeting on overall financial planning and operational efficiency.

Understand the process of budget preparation for for-profit organizations, including forecasting of cash receipts and disbursements.

Ability to perform budget calculations for specific items like manufacturing overhead, selling, and administrative expenses.

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Definitions:

Discount Period

The time frame between the beginning of a loan or credit term and the date the full payment is due, during which a discount may be offered for early payment.

Aging Schedule

A report categorizing a company's accounts receivable according to the length of time an invoice has been outstanding, used to determine credit and collection policies.

Uncollectible Accounts Receivable

Money owed to a company that it does not expect to collect due to the debtor's inability to pay.

Bad Debt Expense

This represents the amount of receivables a company believes it can no longer collect, reflecting potential losses for accounts receivable or loans that are not expected to be fully paid.