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

question 4

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 per unit, and the price of bananas $2 per unit.His income was $40 per day.If the price of apples increased to $1.50 and the price of bananas fell to $1, then in order to be able to just afford his old bundle, Charlie would have to have a daily income of

• A)$40.
• B)$20.
• C)$60.
• D)$81.
• E)$160.

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Definitions:

Butane

A saturated hydrocarbon with the formula C4H10, consisting of four carbon atoms linked in a straight chain or branched.

C3-C4 Bond

In organic chemistry, the covalent bond between the third and fourth carbon atoms in a carbon chain.

Newman Projection

A method of visualizing molecules in chemistry that shows the conformation of a chemical bond from the perspective of looking down the axis of the bond.

Hexane

A saturated hydrocarbon with six carbon atoms and a molecular formula of C6H14.