Table 10-2 Table 10-2 Above Shows Keira's Utility from Soup and Sandwiches

question 206

Multiple Choice

Table 10-2

Table 10-2 above shows Keira's utility from soup and sandwiches. The price of soup is $2 per cup and the price of a sandwich is $3. Keira has $18 to spend on these two goods.
-Refer to Table 10-2.If Keira maximizes her utility, how many units of each good should she buy?

• A)1 cup of soup and 5 sandwiches
• B)3 cups of soup and 4 sandwiches
• C)6 cups of soup and 2 sandwiches
• D)4 cups of soup and 3.5 sandwiches

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Definitions:

Long Hedger

An investor who purchases futures contracts or the underlying asset to protect against potential price increases.

Short Hedger

An investor who enters into contracts to protect against potential losses from declining prices in the assets they hold.

Decrease

A reduction in quantity, size, or intensity of a particular activity, value, or level.

Financial Futures Contracts

Agreements to buy or sell financial instruments or commodities at a future date for a price that is established at the time of the contract.