Charlie Has a Utility Function U(x_A, X_B)=x_Ax_B, the Price of Apples

question 42

Multiple Choice

Charlie has a utility function U(x_A, x_B) =x_Ax_B, the price of apples is $1, and the price of bananas is $2.If Charlie's income were $120, how many units of bananas would he consume if he chose the bundle that maximized his utility subject to his budget constraint?

• A)30
• B)15
• C)60
• D)6
• E)90

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Definitions:

Purchases Journals

Accounting journals used to record all purchases of goods and services on credit for the purpose of resale.

Cash Receipts Journal

A dedicated accounting journal used to record all cash inflows or receipts, including cash sales and accounts receivable collections.

Other Accounts Column

A column in ledger books or accounting journals used to record transactions that do not fit into the standard categories provided, offering flexibility for miscellaneous entries.

Subsidiary Ledgers

Detailed ledgers that contain information about specific accounts, which are then summarized and included in a company's general ledger.