Robert's Utility Function Is U(x, Y)= Min{4x, 2x + Y}

question 46

Multiple Choice

Robert's utility function is U(x, y) = min{4x, 2x + y}.The price of x is $3 and the price of y is $1.Robert's income offer curve is

• A)a ray from the origin with a slope of 2.
• B)a line parallel to the x axis.
• C)a line parallel to the y axis.
• D)the same as his Engel curve for x.
• E)none of the above.

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Definitions:

Date of Record

The date set by a company on which the shareholders must be registered to be eligible for dividends or other benefits.

Penny Stocks

Refers to shares of small companies traded at very low prices, often considered highly speculative.

Underpricing

The practice of setting the initial stock price below its intrinsic value during an initial public offering (IPO).

Dilution Effects

In finance, the decrease in existing shareholders' ownership percentage of a company as a result of the company issuing more shares.