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

question 7

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 $19 and was paying a price of $5 for earrings when the price of earrings went up to $11, then the equivalent variation of the price change was

• A)$19.
• B)$38.
• C)$9.50.
• D)$4.75.
• E)$14.25.

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Definitions:

Equity Account

An account that represents the owner's or shareholders' residual interest in the assets of a company after deducting liabilities.

Common Stock

This represents ownership shares in a corporation, providing voting rights and entitling the holder to a share of the company's success through dividends and capital appreciation.

Stockholder

An individual or entity that owns shares in a corporation, giving them ownership interest.

Dividends Account

An account used in bookkeeping that records the dividends paid out to shareholders from a corporation's earnings.