Charlie Has a Utility Function U(x_A, X_B) = X_Ax_B, the Price

question 54

Multiple Choice

Charlie has a utility function U(x_A, x_B) = x_Ax_B, the price of apples is $1, and the price of bananas is $2. If Charlie's income were $200, how many units of bananas would he consume if he chose the bundle that maximized his utility subject to his budget constraint?

• A) 25
• B) 50
• C) 10
• D) 100
• E) 150

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Definitions:

Type II Error

A Type II Error occurs in hypothesis testing when a false null hypothesis is not rejected, meaning a real effect or difference was missed.

Null Hypothesis

A statement used in statistics that suggests there is no significant difference or effect, serving as the default assumption to be tested.

Type I Error

The error of rejecting the null hypothesis when it is true, often referred to as a "false positive."

Confidence Interval

An interval of values, pulled from a sample's statistics, with a good chance of containing the elusive value of a population parameter.