Charlie Consumes Apples and Bananas $\mathbf{U}\left(X_{A}, X_{B}\right)=x_{A} x^{2} B$

question 25

Multiple Choice

Charlie consumes apples and bananas. His utility function is $\mathbf{U}\left(X_{A}, X_{B}\right) =x_{A} x^{2} B$
-refer to scenario above, Charlie's utility function is x_Ax_B.The price of apples used to be $1, the price of bananas used to be $2, and his income used to be $40.If the price of apples increased to $5 and the price of bananas stayed constant, the substitution effect on Charlie's apple consumption would reduce his consumption by

• A)8 apples.
• B)13 apples.
• C)16 apples.
• D)4 apples.
• E)None of the above.

---

Definitions:

Organic

Refers to substances or products derived from living organisms, often used in context with food produced without synthetic pesticides or fertilizers.

Cluster Organizations

Groups of independent companies or organizations that collaborate closely in a particular field to achieve greater efficiency and productivity.

Organizational Culture

The collective values, beliefs, and norms that shape behaviors and practices within an organization, influencing its social and psychological environment.

Lower Turnover

The reduction in the rate at which employees leave a company, contributing to improved organizational stability and reduced costs for recruitment and training.