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:

Torts

A branch of civil law dealing with situations where one's negligence or intentional act causes harm or loss to another, leading to legal liability.

Minor Children

Individuals under the age of legal adulthood, who are considered incapable of making legal decisions on their own behalf.

Arbitration Provision

A clause in a contract that requires the parties to resolve their disputes through an arbitration process rather than through the court system.

Illegality

The quality or state of being contrary to law; involves actions that are against the law.