The Only Quantities of Good 1 That Barbie Can Buy

question 7

Multiple Choice

the only quantities of good 1 that Barbie can buy are 1 unit or zero units.For x₁ equal to zero or 1 and for all positive values of x₂, suppose that Barbie's preferences were represented by the utility function (x₁ + 10) (x₂ + 12) .Then if her income were $4, her reservation price for good 1 would be

• A)$2.91.
• B)$6.50.
• C)$1.45.
• D)$.83.
• E)$1.10.

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Definitions:

Output Expands

When the production of goods or services increases in response to market demand or other factors.

Fixed Cost

Costs that remain constant regardless of the level of production or sales, such as lease payments and salaries.

Quantity

The amount or number of a material or immaterial good considered as a unit or total.

Average Total Costs

The total cost of production (including both fixed and variable costs) divided by the number of units produced, representing the average expense per unit.