Charlie has the utility function U(x_A, x_B)=x_Ax_B.His indifference curve passing through 6 apples and 16 bananas will also pass through the point where he consumes 2 apples and A)12 bananas. B)24 bananas. C)50 bananas. D)54 bananas. E)48 bananas.

Question

Quizplus · Accepted Answer

Charlie's utility function suggests that his utility depends on the product of the quantities of apples (x) and bananas (y) he consumes. Given the indifference curve passing through the point (6 apples, 16 bananas), we can calculate his utility at this point, which is $6 \times 16 = 96$. To find another point on the same indifference curve, we need to find a combination of apples and bananas that gives the same utility. For 2 apples, the equation is $2 \times y = 96$, solving for $y$ gives $y = 48$. Therefore, the point (2 apples, 48 bananas) is on the same indifference curve.

Charlie Has the Utility Function U(xA, XB)=xAxB

Charlie Has the Utility Function U(x_A, X_B)=x_Ax_B