Suppose That Morris Has the Utility Function U(b, W)= 5b

question 4

Multiple Choice

suppose that Morris has the utility function U(b, w) = 5b + 15w and Philip has the utility function U(b, w) = bw.If we draw an Edgeworth box with books on the horizontal axis and wine on the vertical axis and if we measure Morris's consumptions from the lower left corner of the box, then the contract curve contains

• A)a straight line with slope 1/3 passing through the lower left corner of the box.
• B)a straight line with slope 1/3 passing through the upper right corner of the box.
• C)a straight line running from the upper right corner of the box to the lower left.
• D)a curve that gets steeper as you move from left to right.
• E)a curve that gets flatter as you move from left to right.

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Definitions:

Cyclical Movement

Refers to the fluctuating trends in economic variables or indicators that follow the cyclical ups and downs of the economy over time.

Moving Average Method

A technique used in time series analysis to smooth out short-term fluctuations and highlight longer-term trends or cycles.

Exponential Smoothing

A technique used in time series data to smooth out short-term fluctuations and highlight longer-term trends or cycles.

Time Series Data

Data collected at successive equally spaced points in time, often used to analyze trends, cycles, or seasonal variations.