Suppose That Eugene Cares Only About Action Figures and Ice

question 125

Multiple Choice

Suppose that Eugene cares only about action figures and ice cream. His utility function is U = A^0.33C^0.67, where A is the number of action figures he owns and C is the number of scoops of ice cream he eats. The price of action figures is $10, and the price of ice cream is $4. Eugene has a budget of $100. Which levels of A and C maximize Eugene's utility?

• A) A = 6.66 and C = 8.33
• B) A = 3.33 and C = 16.66
• C) A = 10 and C = 0
• D) A = 6 and C = 10

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Definitions:

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Turned into a liquid form, often referring to gases that have been converted to liquid under pressure.

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A type of seismic wave that compresses and expands the ground, being the fastest kind of seismic wave and the first to be recorded by seismographs during an earthquake.