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

question 16

Multiple Choice

In Problem 1, 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 $160, how many units of bananas would he consume if he chose the bundle that maximized his utility subject to his budget constraint?

• A) 8
• B) 40
• C) 20
• D) 80
• E) 120

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Definitions:

Ln

The natural logarithm, which is the logarithm to the base \(e\), where \(e\) is an irrational and transcendental constant approximately equal to 2.71828.

Expression

A combination of symbols and numbers in mathematics that represents a quantity or relationship but does not include an equality sign.

Logarithmic Equation

A logarithmic equation is an equation that involves the logarithm of an expression equal to a value.

Decimal Places

The positions to the right of the decimal point in a number, each place representing a power of ten in the base ten number system.