If Bernice (Whose Utility Function Is Min{x, Y}, Where X

question 30

Multiple Choice

If Bernice (whose utility function is min{x, y}, where x is her consumption of earrings and y is money left for other stuff) had an income of $13 and was paying a price of $2 for earrings when the price of earrings went up to $3, then the equivalent variation of the price change was

• A)$3.25.
• B)$4.33.
• C)$8.67.
• D)$1.63.
• E)$3.79.

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Definitions:

Cash Paid

The actual outflow of cash from a company to settle obligations, such as paying for goods, services, or expenses.

Noncash Investing

Transactions that affect a company's investments not involving direct cash flows, such as asset swaps.

Financing Activities

Transactions and events where cash is raised from or paid to investors and creditors, such as issuing stock, paying dividends, and borrowing money.

Common Stock

A type of equity security that represents ownership in a corporation, giving shareholders voting rights and a share in the company's profits through dividends.