Can you give clear workings of the following question please? Bob views apples and oranges as perfect substitutes in his consumption, and MRS = 1 for all combinations of the two goods in his indifference map. Suppose the price of apples is $4 per pound, the price of oranges is $3 per pound, and Bobʹs budget is $30 per week. What is Bobʹs utility maximizing choice between these two goods? A. 4 pounds of apples and 6 pounds of oranges B. 5 pounds of apples and 5 pounds of oranges C. no apples and 10 pounds of oranges D. 15 pounds of apples and no oranges
Can you give clear workings of the following question please? Bob views apples and oranges as perfect substitutes in his consumption, and MRS = 1 for all combinations of the two goods in his indifference map. Suppose the price of apples is $4 per pound, the price of oranges is $3 per pound, and Bobʹs budget is $30 per week. What is Bobʹs utility maximizing choice between these two goods? A. 4 pounds of apples and 6 pounds of oranges B. 5 pounds of apples and 5 pounds of oranges C. no apples and 10 pounds of oranges D. 15 pounds of apples and no oranges
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Can you give clear workings of the following question please?
Bob views apples and oranges as perfect substitutes in his consumption, and MRS = 1 for all combinations of the two goods in his indifference map. Suppose the price of apples is $4 per pound, the price of oranges is $3 per pound, and Bobʹs budget is $30 per week. What is Bobʹs utility maximizing choice between these two goods?
A. |
4 pounds of apples and 6 pounds of oranges |
|
B. |
5 pounds of apples and 5 pounds of oranges |
|
C. |
no apples and 10 pounds of oranges |
|
D. |
15 pounds of apples and no oranges |
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