Abduls Utility Is U(X A, Y A)= Min{X A, Y

question 27

Multiple Choice

Abduls utility is U(X A, Y A) = min{X A, Y A}, where X A, and Y A are his consumptions of goods X and Y respectively.Babettes utility function is U(X B, Y B) = X B Y B, where X B and Y B are her consumptions of goods X and Y.Abduls initial endowment is no units of Y and 6 units of X.Babettes initial endowment is no units of X and 10 units of Y.If X is the numeraire good and p is the price of good Y, then supply will equal demand in the market for Y if

• A)6/(p + 1)+ 5 = 10.
• B)10/6= p.
• C)10/(p + 1)+ 3 = 10.
• D)min{6, 10} + 6/2p = 10.
• E)min{6, 10} + 10/2p = 10.

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Definitions:

Unamortized Premium

The portion of the bond premium that has not yet been expensed to interest over the life of the bond.

Straight-Line Method

A depreciation technique which evenly spreads the cost of a fixed asset over its useful life.

Effective Interest Rate Method

A method of calculating the amortized cost of a bond and the periodic interest expense over the life of the bond.

Material Differences

Significant discrepancies or variations that can affect the decisions of users of financial statements, often necessitating adjustments or disclosures.