25. Imagine a consumer who spends her income (y) entirely on apples and ba- nanas. Apples are plotted on the horizontal axis, bananas on the vertical. Let Pa and P, denote the prices of apples and bananas. At an interior solution to the consumer's utility-maximization problem, the consumer's marginal rate of substitution is

25. Imagine a consumer who spends her income (y) entirely on apples and ba- nanas. Apples are plotted on the horizontal axis, bananas on the vertical. Let Pa and P, denote the prices of apples and bananas. At an interior solution to the consumer's utility-maximization problem, the consumer's marginal rate of substitution is

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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