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In Problem 1, Charlie Has a Utility Function U(xA, XB)

Question 16

Multiple Choice

In Problem 1, Charlie has a utility function U(xA, xB) = xAxB, the price of apples is $1, and the price of bananas is $2. If Charlie's income were $160, how many units of bananas would he consume if he chose the bundle that maximized his utility subject to his budget constraint?


A) 8
B) 40
C) 20
D) 80
E) 120

Correct Answer:

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