Charlie has the utility function U(x_A, x_B)= x_Ax_B.His indifference curve passing through 35 apples and 18 bananas will also pass through the point where he consumes 5 apples and A)131 bananas. B)137 bananas. C)21 bananas. D)42 bananas. E)126 bananas.

Question

Quizplus · Accepted Answer

Charlie's utility function is U(x_A, x_B) = x_A * x_B. The utility at 35 apples and 18 bananas is 35 * 18 = 630. To find the number of bananas when he consumes 5 apples, set 5 * x_B = 630, solving for x_B gives x_B = 126.

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

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