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

question 7

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) 80
• B) 40
• C) 8
• D) 20
• E) 120

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the values deviate from the mean.

Returns

Returns are the profits or losses generated from an investment over a specified period, often expressed as a percentage of the initial investment amount.

Risk

The possibility of loss or another adverse outcome resulting from a particular action or event.

Negatively Skewed Distribution

A probability distribution that is skewed to the left, indicating that the tail on the left side of the probability density function is longer or fatter than the right side.