Asked by Patricia Garcia on Jun 29, 2024

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Charlie has the utility function U(xA, xB)  xAxB.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.

Utility Function

A mathematical representation that quantifies an individual's preference for various outcomes or goods, indicating their level of satisfaction.

Indifference Curve

A graphical representation showing combinations of goods or services that provide the same level of satisfaction to a consumer.

Apples

Edible fruits from the Malus domestica tree, characterized by their sweet taste and variety of colors, and consumed worldwide.

  • Develop the ability to apply utility functions to the preferences of consumers.
  • Examine indifference curves and the incline of these curves at various points of consumption.
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Zybrea KnightJul 02, 2024
Final Answer :
E
Explanation :
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 6×16=966 \times 16 = 966×16=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×y=962 \times y = 962×y=96 , solving for yyy gives y=48y = 48y=48 . Therefore, the point (2 apples, 48 bananas) is on the same indifference curve.