Bernice Has the Utility Function U(x, Y)= Min{x, Y}, Where

question 1

Multiple Choice

Bernice has the utility function u(x, y) = min{x, y}, where x is the number of pairs of earrings she buys per week and y is the number of dollars per week she has left to spend on other things.(We allow the possibility that she buys fractional numbers of pairs of earrings per week.) If she originally had an income of $18 per week and was paying a price of $8 per pair of earrings, then if the price of earrings rose to $14, the compensating variation of that price change (measured in dollars per week) would be closest to

• A)$12.
• B)$25.
• C)$7.20.
• D)$24.
• E)$23.

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Definitions:

Direct Investment

The action of an entity from one country investing to achieve dominant control over a corporation in another country.

Foreign Market

The markets outside the company's home country where it seeks to sell its products or services.

Greatest Commitment

The highest level of dedication or obligation one can have towards a cause, goal, or relationship.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task, project, or business activity.