If Charlie's Utility Function Were X ⁵_A X_B, If Apples

question 21

Multiple Choice

if Charlie's utility function were X ⁵_A X_B, if apples cost 70 cents each, and if bananas cost 10 cents each, Charlie's budget line would be tangent to one of his indifference curves whenever

• A)5X_B = 7X_A.
• B)X_B = X_A.
• C)X_A = 5X_B.
• D)X_B = 5X_A.
• E)70X_A + 10X_B = M.

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Definitions:

Operating Cycle

The average time period between the acquisition of materials for production and the receipt of cash from sales of the finished goods, critical for managing cash flow.

Current Liabilities

Financial obligations that a company is expected to pay within one year.

Liquidity

The ability to pay current obligations.

Liabilities

Financial obligations or debts that a company owes to external parties.