Asked by
Jonathan Xavier
on Dec 01, 2024Verified
Charlie's utility function is U(A, B) = AB, where A and B are the numbers of apples and bananas, respectively, that he consumes.If Charlie is consuming 35 apples and 175 bananas, then if we put apples on the horizontal axis and bananas on the vertical axis, the slope of his indifference curve at his current consumption is
A) -36.
B) -10.
C) -1/5.
D) -5.
E) -1/10.
Utility Function
A mathematical representation showing how different combinations of goods or services create levels of happiness or satisfaction for a consumer.
Indifference Curve
A graph showing different bundles of goods between which a consumer is indifferent, meaning they have no preference for one combination over another, all else being equal.
Apples
While commonly known as a fruit, in economics, "apples" could metaphorically refer to any basic commodity used in comparative analysis.
- Scrutinize indifference curves and the slope changes they undergo at distinct consumption points.
Verified Answer
CR
Learning Objectives
- Scrutinize indifference curves and the slope changes they undergo at distinct consumption points.