Suppose a Consumer's Level of Satisfaction Is Given by AB2

question 35

Multiple Choice

Suppose a consumer's level of satisfaction is given by AB2 and he/she has a total of $10 to spend on goods A and B. If the price of A is $1 and the price of B is $2, and assuming you can only purchase whole units (not fractional) of A and B, how many units of A and B should he/she purchase?

• A)2 units of A and 4 units of B.
• B)4 units of A and 3 units of B.
• C)6 units of A and 2 units of B.
• D)0 units of A and 5 units of B.

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Definitions:

Productivity

The measure of efficiency in converting inputs into useful outputs, commonly used in analyzing the performance of businesses, economies, or individual workers.

Supervisory Costs

Expenses associated with overseeing and managing employees, including salaries of supervisors and costs related to training and supervising staff.

Flexible Benefit Plans

Employee benefit programs that allow workers to choose from a variety of pre-tax benefits, tailoring the package to their personal needs.

Economic Value

The worth of a good or service determined by its capacity to provide utility to buyers or the income it generates for sellers.