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:

Internal Accounting Systems

The set of procedures and records that a company's management uses for financial planning, analysis, and decision making within the company.

Dysfunctional Results

Outcomes of processes or activities that negatively affect the goals or functioning of an organization.

External Failure Cost

Costs incurred when a defective product or service is discovered after delivery to the customer, including returns, repairs, and lost sales.

Prevention Costs

Costs incurred to prevent defective units before they are produced. For example, reengineering products or production processes.