The Only Quantities of Good 1 That Barbie Can Buy

question 21

Multiple Choice

the only quantities of good 1 that Barbie can buy are 1 unit or zero units.For x₁ equal to zero or 1 and for all positive values of x₂, suppose that Barbie's preferences were represented by the utility function (x₁ + 10) (x₂ + 4) .Then if her income were $12, her reservation price for good 1 would be

• A)$2.50.
• B)$1.45.
• C)$2.91.
• D)$2.50
• E)$.30.

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Definitions:

Net Assets

The total assets of an entity minus its total liabilities, representing the owners' equity in the company.

Goodwill

An intangible asset representing the excess of purchase price over the fair market value of identifiable assets and liabilities in a business acquisition.

Fair Value

The amount one would get from selling an asset or would need to spend to settle a liability in a well-organized sale involving market players on the date of evaluation.

Tax Rate

The fraction of earnings on which the government imposes taxes for individuals or corporations.