Multiple Choice
Charlie consumes apples and bananas; his utility function is U(a, b) = ab. Charlie's fruit farm yielded 5 apples and 10 bananas. In addition, Charlie has $10 that he was given by a secret admirer. Charlie can buy or sell apples at $2 each and he can buy or sell bananas at $1 each. Charlie will consume
A) more apples and more bananas than he grows.
B) more apples and fewer bananas than he grows
C) fewer apples and more bananas than he grows
D) fewer apples and more bananas than he grows.
E) exactly as many apples as he grows and more bananas than he grows.
Correct Answer:
Verified
Correct Answer:
Verified
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