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Charlie Has a Utility Function U(xA, XB)=xAxB, the Price of Apples

Question 20

Multiple Choice

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

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