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

question 9

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

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Definitions:

BCG Portfolio Analysis

A strategic management tool that classifies a company's business units or products based on market growth rate and market share relative to competitors.

High Rate of Growth

A situation where a business or economy expands at an above-normal rate, often leading to increased revenue or economic improvements.

Dominates Its Market

Refers to a company or a product that holds a predominant share or influence over others in the same industry or category.

SBU Level

Strategic Business Unit level; refers to a unit within a larger enterprise that focuses on specific market segments or product lines, operating with its strategic objectives and planning.