In Problem 1, If Charlie's Utility Function Were X⁵_AX_B, If

question 6

Multiple Choice

In Problem 1, if Charlie's utility function were X⁵_AX_B, if apples cost 70 cents each, and if bananas cost 10 cents each, Charlie's budget line would be tangent to one of his indifference curves whenever

• A) 5X_B = 7X_A.
• B) X_B = X_A.
• C) X_A = 5X_B.
• D) X_B = 5X_A.
• E) 70X_A + 10X_B = M.

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Definitions:

Income Statement

A financial statement that shows a company’s revenue and expenses over a specified period of time, resulting in net profit or loss.

Liability

Financial obligations or debts owed by a business to external parties, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Goods

Tangible products or merchandise that are manufactured, bought, and sold in commerce.

Services

The action of helping or doing work for someone, often producing intangible benefits.