In Problem 1, Charlie Has the Utility Function U(x_A, X_B)

question 18

Multiple Choice

In Problem 1, Charlie has the utility function U(x_A, x_B) = x_Ax_B. His indifference curve passing through 15 apples and 16 bananas will also pass through the point where he consumes 3 apples and

• A) 40 bananas.
• B) 83 bananas.
• C) 20 bananas.
• D) 87 bananas.
• E) 80 bananas.

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Definitions:

Payoff Matrix

A table that displays the potential outcomes for each player in a game, given the choices of all players.

Gains and Losses

The difference between the amount earned and the amount spent in buying, operating, or producing something.

Duopoly

A market structure characterized by two producers or sellers dominating the market.

Dominant Strategy

In game theory, a strategy that is optimal for a player, regardless of the strategies chosen by other players in the game.