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

question 11

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 $1.75 and the price of bananas fell to $.25, then in order to be able to just afford his old bundle, Charlie would have to have a daily income of

• A)$76.
• B)$18.75.
• C)$56.25.
• D)$37.50.
• E)$150.

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Definitions:

Mutually Exclusive Events

Two or more events that cannot occur at the same time in any given experiment or real-life situation.

Conditional Probability

The probability of one event occurring with some relationship to one or more other events.

Conditional Probability

The probability of an event occurring given that another event has already occurred.

Conditional Probability

The probability of an event occurring given the occurrence of another event, often represented as P(A|B).