if Charlie's utility function were X 3 A X B , the price of apples were p A , the price of bananas were p B , and his income were m, then Charlie's demand for apples would beA) m/(p A  p B ) .B) 0.33p A m.C) 0.75m/p A .D) m/(2p A ) .E) 1.3p B m/p A .

Question

if Charlie's utility function were X  3 A  X B , the price of apples were p A , the price of bananas were p B , and his income were m, then Charlie's demand for apples would beA) m/(p A     p B ) .B) 0.33p A m.C) 0.75m/p A .D) m/(2p A ) .E) 1.3p B m/p A .

Isaac Moore · Accepted Answer

Final Answer : C, Explanation :  To find Charlie's demand for apples, we can use the formula for the optimal bundle:MU1/P1=MU2/P2Here, we have:MU1 =  3 AP1 = p A +  XMU2 =  P2 = p B +  XSetting the two MUs equal and solving for X, we get:X = ( 3 A)/(p A +  X) * (p B +  X)/ Simplifying, we get:X = ( 3 A)/(p A* B) * (m/ )X = ( 3 A)/(p A* B) * (m/p A )X = ( 3 A)/(p A * B) * mDividing X by m/p A , we get the demand for apples:X/(m/p A ) = ( 3 A)/(p A * B)Plugging in the values given in the answer choices, we find that only choice C satisfies this equation. Therefore, the correct answer is C.

if Charlie's utility function were X ³_AX_B, the price of apples were p_A, the price of bananas were p_B, and his income were m, then Charlie's demand for apples would be

A) m/(p_A  p_B) .
B) 0.33p_Am.
C) 0.75m/p_A.
D) m/(2p_A) .
E) 1.3p_Bm/p_A.

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Learning Objectives

Learning Objectives

Related questions

if Charlie's utility function were X 3A XB, the price of apples were pA, the price of bananas were pB, and his income were m, then Charlie's demand for apples would beA) m/(pA  pB) .B) 0.33pAm.C) 0.75m/pA.D) m/(2pA) .E) 1.3pBm/pA.

Definitions

Learning Objectives

Learning Objectives

Related questions

if Charlie's utility function were X ³_AX_B, the price of apples were p_A, the price of bananas were p_B, and his income were m, then Charlie's demand for apples would be

A) m/(p_A  p_B) .
B) 0.33p_Am.
C) 0.75m/p_A.
D) m/(2p_A) .
E) 1.3p_Bm/p_A.