Suppose That Romeo Has the Utility Function U = S

question 14

Multiple Choice

Suppose that Romeo has the utility function U = S ⁶_RS⁴_J and Juliet has the utility function U = S⁴_RS ⁶_J, where S_R is Romeo's spaghetti consumption and S_J is Juliet's.They have 70 units of spaghetti to divide between them.

• A)Romeo would want to give Juliet some spaghetti if he had more than 35 units of spaghetti.
• B)Juliet would want to give Romeo some spaghetti if she has more than 40 units.
• C)Romeo and Juliet would never disagree about how to divide the spaghetti.
• D)Romeo would want to give Juliet some spaghetti if he has more than 38 units of spaghetti.
• E)Juliet would want to give Romeo some spaghetti if she has more than 42 units of spaghetti.

Understand the impact of time on the growth rate of investments.

Apply the concept of present value and discounting in investment decisions.

Calculate the growth rate of a population or establishments using past data.

Understand and apply the formula for compounded annual growth rate (CAGR).

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Definitions:

Preexisting Obligation

An obligation that already exists before a certain action is taken or an agreement is made, often relevant in contract law.

Under Seal

denotes a formal legal process or document that has been officially sealed, indicating confidentiality or authenticity.

Substituting a New Contract

Replacing an existing contract with a new one, which extinguishes the obligations under the original contract.

Mutual Consideration

In contract law, mutual consideration is the exchange of value or promises between parties that is a requisite for the formation of a binding contract.