Joseph's utility function is given by x_A+2x_B, where x_Adenotes his consumption of apples and x_B his consumption of bananas. If a banana cost 50 cents and an apple costs also 50 cents, how many bananas will he buy if his income is $10? A)0 B)10 C)20 D)5

Question

Quizplus · Accepted Answer

Given the utility function and the prices of apples and bananas are the same, and assuming Joseph wants to maximize his utility, he will distribute his income evenly between apples and bananas. With $10 and each banana costing 50 cents, he can buy 20 bananas.

Joseph's Utility Function Is Given by XA +2xB, Where XA

Joseph's Utility Function Is Given by X_A+2x_B, Where X_A