Suppose Sam, a Typical Citizen, Has the Utility Function U(m

question 22

Multiple Choice

suppose Sam, a typical citizen, has the utility function U(m, d, h) = m + 13d² - d² - 6h, where d is the number of hours per day that he spends driving around, h is the average number of hours per day spent driving around by other people in his home town, and m is the amount of money he has left to spend on other stuff besides gasoline and auto repairs.Gas and auto repairs cost $1 per hour of driving.If each citizen believes that their own driving will not affect the amount of driving done by others, they will all drive D₁ hours per day.If all citizens drive to maximize the utility of a typical citizen, they will all drive D₂ hours per day, where

• A)D₁ = 8 and D₂ = 4.
• B)D₁ = 6 and D₂ = 3.
• C)D₁ = D₂ = 6.
• D)D₁ = 9 and D₂ = 0.
• E)D₁ = 6 and D₂ = 1.

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Definitions:

Dividend Payout Ratio

A financial ratio that shows the percentage of a company's net income that is paid out to its shareholders as dividends.

Year 2

A term that refers to the second year in a specific period, often used in planning, reporting, or comparison contexts.

Book Value Per Share

A financial measure used to determine the per share value of a company based on its equity available to shareholders.

Year 2

Refers to the second year of a specified time frame or period, often used in financial and operational planning or analysis.