Multiple Choice
Suppose that Eugene cares only about action figures and ice cream. His utility function is U = A0.33C0.67, where A is the number of action figures he owns and C is the number of scoops of ice cream he eats. The price of action figures is $10, and the price of ice cream is $4. Eugene has a budget of $100. Which levels of A and C maximize Eugene's utility?
A) A = 6.66 and C = 8.33
B) A = 3.33 and C = 16.66
C) A = 10 and C = 0
D) A = 6 and C = 10
Correct Answer:
Verified
Correct Answer:
Verified
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