Charlie's Utility Function Is U(A, B)= AB, Where a and B

question 24

Multiple Choice

Charlie's utility function is U(A, B) = AB, where A and B are the numbers of apples and bananas, respectively, that he consumes.If Charlie is consuming 15 apples and 30 bananas, then if we put apples on the horizontal axis and bananas on the vertical axis, the slope of his indifference curve at his current consumption is

• A)-16.
• B)-2.
• C)-4.
• D)-1/2.
• E)-1/4.

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Definitions:

Perfectly Elastic

A situation in economics where the quantity demanded or supplied changes by an infinite amount in response to any change in price, represented graphically as a horizontal line.

Monopolistic Competitor

A type of market structure characterized by many firms selling products that are similar but not identical, allowing for some degree of market power.

Monopolistically Competitive

Refers to a market setup where multiple companies offer products that are closely related but not the same, granting them limited market influence.

Purely Competitive

A market structure characterized by many buyers and sellers, with no single participant able to influence the market price, leading to products that are very similar.