Bernice's Preferences Can Be Represented by the Utility Function, U(x

question 5

Multiple Choice

Bernice's preferences can be represented by the utility function, U(x, y) = min{x, y}.She faces prices ($2, $1) , and her income is $12.If prices change to ($3, $1) , the compensating variation

• A)equals the equivalent variation.
• B)is $2 greater than the equivalent variation.
• C)is $2 smaller than the equivalent variation.
• D)is $1 greater than the equivalent variation.
• E)There is not enough information to determine which variation is larger.

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Definitions:

Actual Customer Orders

Purchase requests made by customers for goods or services, representing real demand rather than forecasted sales.

Push Manufacturing

A type of production strategy where products are made in anticipation of customer demand based on forecasts, leading to stockpiling.

Estimated Customer Demand

An approximation of the quantity of a product or service that consumers will purchase in a specified period.

Pull Manufacturing

A manufacturing approach that relies on demand to pull products through the production process, as opposed to producing goods in anticipation of demand.