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

Question 2

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 $400, how many units of bananas would he consume if he chose the bundle that maximized his utility subject to his budget constraint?


A) 100
B) 20
C) 200
D) 50
E) 300

Correct Answer:

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