Suppose That Romeo Has the Utility Function U = S⁵_RS²_J

question 7

Multiple Choice

Suppose that Romeo has the utility function U = S⁵_RS²_J and Juliet has the utility function U = S¹_RS⁵_J, where S_R is Romeo's spaghetti consumption and S_J is Juliet's.They have 36 units of spaghetti to divide between them.

• A)Romeo would want to give Juliet some spaghetti if he had more than 18 units of spaghetti.
• B)Juliet would want to give Romeo some spaghetti if she had more than 28 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 had more than 26 units of spaghetti.
• E)Juliet would want to give Romeo some spaghetti if she had more than 30 units of spaghetti.

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Definitions:

Actual Direct Labour Hours

The real number of labor hours spent on a production process as opposed to planned or estimated hours.

Manufacturing Overhead Cost

Indirect costs related to manufacturing that are not directly tied to a specific product, such as factory maintenance and utilities.

Normal Costing System

An accounting system that assigns costs to products based on the normal levels of materials, labor, and overhead.

Inventory Accounts

Accounts used to track the cost of goods a company has in stock during an accounting period, including raw materials, work in progress, and finished goods.