Suppose That Romeo Has the Utility Function U = S

question 6

Multiple Choice

Suppose that Romeo has the utility function U = S ⁵_RS ²_J and Juliet has the utility function U = S ²_RS ⁵_J, where S_R is Romeo's spaghetti consumption and S_J is Juliet's.They have 42 units of spaghetti to divide between them.

• A)Romeo would want to give Juliet some spaghetti if he had more than 21 units of spaghetti.
• B)Romeo would want to give Juliet some spaghetti if he has more than 26 units of spaghetti.
• C)Juliet would want to give Romeo some spaghetti if she has more than 28 units.
• D)Romeo and Juliet would never disagree about how to divide the spaghetti.
• E)Juliet would want to give Romeo some spaghetti if she has more than 30 units of spaghetti.

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Definitions:

Safety Inventory

A buffer of stock kept on hand to protect against variability in demand or supply, ensuring that a product remains available for customers despite uncertainties.

Low Demand

Refers to a situation where the market's desire for a product or service is lower than the supply.

Low Value Items

Products or materials that have a relatively low cost or worth compared to other items in an inventory or catalogue.

Total Cost

The complete expense incurred for producing, maintaining, and selling a product or service, including fixed and variable costs.