Charlie's Utility Function Is X_Ax_B

question 7

Multiple Choice

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)4 apples.
• B)13 apples.
• C)8 apples.
• D)16 apples.
• E)None of the above.

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Definitions:

VFD

A Variable Frequency Drive is a motor controller device that operates an electric motor by adjusting the voltage and frequency provided to it.

Rectifier

An electrical device that converts alternating current (AC) to direct current (DC), allowing the flow of charge in one direction only.

Variable Torque

Refers to motors or drives designed to manage varying load torque demands in applications like fans or pumps.

Mechanical Loads

Forces, torques, or loads applied to a mechanical system, influencing its performance and structural integrity.