In a Two-Good Exchange Economy,A's Utility Is Given By $U _ { A } = x ^ { 1 / 3 } y ^ { 2 / 3 }$

question 10

Multiple Choice

In a two-good exchange economy,A's utility is given by $U _ { A } = x ^ { 1 / 3 } y ^ { 2 / 3 }$ and B's utility by $U _ { B } = x ^ { 2 / 3 } y ^ { 1 / 3 }$
Along the contract curve x/y for B will be times x/y for A.

• A)4.
• B)3.
• C)2.
• D)1.

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Definitions:

Face Value

The nominal value stated on a financial instrument, such as a bond or stock certificate.

Bond Price

The market price at which a bond is traded, reflecting its current value as determined by interest rates, the bond's credit quality, and other factors.

Interest Payments

Payments made to lenders or creditors as compensation for borrowing money, typically calculated as a percentage of the principal amount.

Face Amount

The amount specified on the face of a bond and the amount for which it will sell if the market rate of interest equals the contract rate.