In Problem 1, 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 15 apples and 30 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) -16.
B) -2.
C) -4.
D) .

Question

Quizplus · Accepted Answer

The formula for the slope of an indifference curve is -MU_A/MU_B, where MU_A is the marginal utility of apples and MU_B is the marginal utility of bananas. 
In this case, Charlie's utility function is U(A,B) = AB, so his marginal utility of apples is MU_A = B and his marginal utility of bananas is MU_B = A.

At his current consumption of 15 apples and 30 bananas, his marginal utility of apples is MU_A = 30 and his marginal utility of bananas is MU_B = 15.

Therefore, the slope of his indifference curve at his current consumption is: 
-Slope = MU_A/MU_B = -30/15 = -2

Therefore, the answer is B.

As for the best choice, we need more information about what is being considered. The question does not provide any additional information about prices or budget constraints, so we cannot determine the best choice(s) based solely on Charlie's preferences.

In Problem 1, Charlie's Utility Function Is U(A, B) =