In Problem 2, Ambrose Has the Utility Function U(x₁, X₂)

question 19

Multiple Choice

In Problem 2, Ambrose has the utility function U(x₁, x₂) = . If Ambrose were initially consuming 4 units of nuts (good 1) and 27 units of berries (good 2) , then what is the largest number of berries that he would be willing to give up in return for an additional 21 units of nuts?

• A) 5
• B) 12
• C) 6
• D) 32
• E) 3

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Definitions:

Test Statistic

A value calculated from sample data that is used in a hypothesis test to determine whether to reject the null hypothesis.

Degrees Of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution or calculation.

Null Hypothesis

A hypothesis stating there is no significant difference or effect, serving as the default assumption in hypothesis testing.

T Test

A statistical test used to compare the means of two groups to see if there is a significant difference between them, often used when dealing with small sample sizes.