Astrid's Utility Function Is U(H_A, C_A)= H_AC_A

question 45

Multiple Choice

Astrid's utility function is U(H_A, C_A) = H_AC_A.Birger's utility function is min{H_B, C_B}.If Astrid's initial endowment is no cheese and 13 units of herring and if Birger's initial endowments are 8 units of cheese and no herring, then where p is a competitive equilibrium price of herring and cheese is the numeraire, it must be that demand equals supply in the herring market.This implies that

• A)13/8 = p.
• B)8/p + 13/2p = 13.
• C)8/13 = p.
• D)8/(p + 1)+ 6.50 = 13.
• E)min{13, 8} = p.

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Definitions:

Market Advantage

A favorable position a company gains in the market, typically through superior products, marketing strategies, or cost efficiencies, which provides a competitive edge over rivals.

Limited Partnership

A business structure where one or more general partners manage the company and are liable for its debts, while the limited partners have limited liability and do not manage the company.

Management Responsibilities

The duties and tasks associated with directing and controlling an organization or one of its units, including planning, organizing, leading, and controlling.

Invest

The act of allocating resources, usually money, with the expectation of generating an income or profit.