In Problem 3, Ambrose's Utility Is U(x₁, X₂) =

question 6

Multiple Choice

In Problem 3, Ambrose's utility is U(x₁, x₂) = . If the price of nuts (good 1) is $1, the price of berries (good 2) is $7, and his income is $238, how many units of nuts will Ambrose choose?

• A) 6
• B) 196
• C) 392
• D) 199
• E) 98

---

Definitions:

Linear Relationship

A type of relationship between two variables where the relationship can be graphically represented by a straight line, indicating a constant rate of change.

Causal Relationship

A connection between two variables where a change in one variable is responsible for a change in another variable.

F Test

A statistical method employed to ascertain if significant variance differences exist among two or more groups.

Coefficient Of Correlation

A numerical measure that quantifies the degree to which two variables are linearly related.