Charlie has a utility function U(x_A, x_B) =x_Ax_B, 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

Utility Function

Refers to the model used by economists to estimate the level of utility or satisfaction a consumer derives from the consumption of goods and services, highlighting consumer preferences.

Budget Constraint

A representation of all the combinations of goods and services a consumer can purchase with their income at given prices.

Income

The financial earnings received by an individual or a business in exchange for their labor, services, or investments, typically measured over a certain period.