Charlie Has the Utility Function U(x_A, X_B)= X_Ax_B

question 48

Multiple Choice

Charlie has the utility function U(x_A, x_B) = x_Ax_B.His indifference curve passing through 35 apples and 18 bananas will also pass through the point where he consumes 5 apples and

• A)131 bananas.
• B)137 bananas.
• C)21 bananas.
• D)42 bananas.
• E)126 bananas.

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Definitions:

Shutdown Point

The level of production and price where a company's revenue just covers its variable costs, below which it would be more economical for the firm to cease operations.

Average Variable Cost

The total variable costs of production divided by the quantity of output produced, representing the variable cost per unit of output.

Normal Rates

The standard or average prices, fees, or charges for goods, services, or financial transactions within a specific sector or economy.

Total Costs

The sum of all expenses incurred in the production of goods or services, including fixed and variable costs.