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:

Preferred Dividend Policy

A company's strategy or practice regarding the payment of dividends to holders of its preferred stock, often detailing the timing and amount of payouts.

Equity Capital

Funds raised by a company in exchange for a share of ownership in the company.

Dividend Payout Ratio

The fraction of net earnings a firm pays to its shareholders as dividends, usually expressed as a percentage.

R&D

Research and Development (R&D) refers to the activities companies undertake to innovate and introduce new products and services.