The function U = xy is an example of a(n)
A) multiplicative utility function
B) additive utility function
C) cardinal utility function

Question

Quizplus · Accepted Answer

The function U = xy involves multiplication of the two variables x and y. Therefore, it is a multiplicative utility function. In contrast, an additive utility function would involve addition of the variables, and a cardinal utility function would assign numerical values to the utility levels (e.g. U = 3, 4, 5, etc.) which is not the case here.

The Function U = Xy Is an Example of A(n)