Question: 1.Mark's utility function is U(xA,xB) = xAxB. Suppose that the price of apples is 1, the price of bananas is 2, and Marks's income is

1.Mark's utility function is U(xA,xB) = xAxB. Suppose that the price of apples is 1, the price of bananas is 2, and Marks's income is 40.

Evaluate the two statements:

Mark can afford a bundle which would offer him utility of 150.

Mark can afford a bundle which would offer him utility of 300.

a.Yes, he can afford both bundles.

b.He can only afford the bundle that offers him utility of 150.

c.He can't afford either bundle.

d.Not enough information.

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