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

question 18

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 7 units of X.Babettes initial endowment is no units of X and 6 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)min{7, 6} + 7/2p = 6.
• B)7/(p + 1)+ 3 = 6.
• C)6/7 = p.
• D)6/(p + 1)+ 3.50 = 6.
• E)min{7, 6} + 6/2p = 6.

---

Definitions:

Liquidity Ratio

A financial metric used to determine a company's ability to pay off its short-term liabilities with its most liquid assets.

Inventory Turnover

This is a ratio showing how many times a company's inventory is sold and replaced over a period, usually a year, indicating the efficiency of inventory management.

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term obligations with its current assets.

Quick Ratio

A measure of a company's ability to meet its short-term obligations with its most liquid assets, excluding inventory.