Joseph's Utility Function Is Given by X_A + 2x_B, Where

question 39

Multiple Choice

Joseph's utility function is given by x_A + 2x_B, where x_A denotes his consumption of apples and x_B his consumption of bananas. Suppose a banana cost 50 cents and an apple costs also 50 cents. If his income is $10, then his consumption bundle (x_A,x_B) is:

• A)(20,40).
• B)(20,20).
• C)(0,20).
• D)(20,0).

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Definitions:

Monopolistic Competitor

A firm operating in a market structure characterized by many producers selling similar but not identical products, leading to some degree of market power and pricing authority.

Marginal Cost

The price of manufacturing an additional unit of a product or service.

Market Demand

The overall amount of a product or service all buyers in a market can and want to buy at different price levels.

Market Output

The total quantity of a good or service produced and offered for sale in a market.