4 tbsp. butter
1 med. onion, chopped
1/4 c. all-purpose flour
1 qt. milk
1 tsp. chicken flavor instant bouillon
1 lb. extra sharp Cheddar cheese, shredded (4 c.)

In 3 quart saucepan over medium heat, in hot butter, cook onion until tender. Stir in flour until blended; cook 1 minute, stirring constantly. Add 1 cup milk and 1/2 cup water; cook, stirring, until mixture boils, thickens. In blender at low speed (with center part of cover removed), blend onion mixture until smooth. Return blended onion mixture to saucepan; stir in remaining milk, bouillon and shredded cheese. Over medium heat, cook until cheese just melts and soup is hot, stirring frequently. Garnish soup with paprika.