MsQuasimodo Has the Utility Function U(x, M)= 100x - X²/2

question 17

Multiple Choice

Ms.Quasimodo has the utility function U(x, m) = 100x - x²/2 + m, where x is her consumption of earplugs and m is money left over to spend on other stuff.If she has $10,000 to spend on earplugs and other stuff and if the price of earplugs rises from $50 to $70, then her net consumer's surplus

• A)falls by 800.
• B)increases by 400.
• C)falls by 600.
• D)falls by 2,800.
• E)increases by 1,600.

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Definitions:

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, often paying fixed dividends.

Callable Preferred Stock

A type of preferred stock that gives the issuer the right to redeem the stock at a predetermined price after a certain date.

Convertible Preferred Stock

A type of preferred stock that gives the holder the option to convert it into a specified number of common stock shares, usually at any time after a predetermined date.

Cumulative Preferred Stock

A type of preferred stock where dividends accrue if not paid as scheduled, ensuring holders receive dividends in arrears before common stockholders get any.