Ella's Utility Function Is Min{5x, Y}

question 7

Multiple Choice

Ella's utility function is min{5x, y}.If the price of x is $10 and the price of y is $15, how much money would she need to be able to purchase a bundle that she likes as well as the bundle (x, y) = (10, 25) ?

• A)$209
• B)$440
• C)$425
• D)$475
• E)$85

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Definitions:

Acquisition Method

A set of accounting procedures used during a merger or acquisition to consolidate the financial statements of both companies into a single set of financials.

Goodwill

An intangible asset that arises when a company is purchased for more than the value of its net tangible assets, often related to reputation or brand.

Fair Value

An estimate of the market value of an asset or liability, based on current prices in an orderly transaction between market participants at the measurement date.

Pre-Acquisition Subsidiary Revenues

Revenues generated by a subsidiary prior to being acquired by a parent company.