Suppose a Person Has $20 and Likes Both Rap Music $\mathrm { U } = \mathrm { C } ^ { 1 / 2 } \mathrm { R } ^ { 1 / 2 }$

question 14

Multiple Choice

Suppose a person has $20 and likes both rap music (R) and country music (C) with a set of preferences so that $\mathrm { U } = \mathrm { C } ^ { 1 / 2 } \mathrm { R } ^ { 1 / 2 }$ . Suppose that the iTunes price of a rap music song is $P _ { R } = 2$ and the price of a country music song is $P _ { C } = 1$ . What is the lowest level of $\text { utility that }$ is unaffordable?

• A)6
• B)7
• C) \(\sqrt { 50 }\)
• D)8

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Definitions:

Budgeted Balance Sheet

A financial statement that projects the financial position of a company at a future date, based on estimated revenues, expenses, and capital expenditures.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overheads - in the cost of a product.

Full Costs

The complete cost of producing an item or providing a service, including direct, indirect, fixed, and variable costs.

Profitable

Describes a business or activity that generates more revenue than it spends in costs, resulting in a financial gain.