Sam's Utility Function Is U(x, Y)=2x + Y, Where X

question 38

Multiple Choice

Sam's utility function is U(x, y) =2x + y, where x is the number of x's he consumes per week and y is the number of y's he consumes per week.Sam has $200 a week to spend.The price of x is $4.Sam currently doesn't consume any y.Sam has received an invitation to join a club devoted to the consumption of y.If he joins the club, Sam can get a discount on the purchase of y.If he belonged to the club, he could buy y for $1 a unit.How much is the most Sam would be willing to pay to join this club?

• A)Nothing
• B)$100 a week
• C)$50 a week
• D)$40 a week
• E)None of the above.

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Definitions:

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating short-term financial health and liquidity.

Operating Cash Flow

Cash generated from the normal business operations of a company, excluding capital expenditures and investment income or expenses.

Comprehensive Income

A measure of all changes in equity of a company that result from recognized transactions and other economic events of the period, excluding transactions with owners in their capacity as owners.

Net Sales

The revenue generated from goods or services sold by a company after returns, allowances for damaged or missing goods, and discounts are subtracted.