Options:1. A) Yes, you can still afford the bundle at your previous consumer equilibrium B) No, you now cannot afford the bundle at your previous consumer equilibrium C) It is uncertain whether or not you can still afford the bundle at your previous consumer equilibrium2. A) For each peck of apples, you will buy 1/3 pounds of oranges B)For each peck of apples, you will buy 1 pounds of oranges C)For each peck of apples, you will buy 3 pounds of oranges D) For each peck of apples, you will buy 6 pounds of oranges Please refer to the following information to answer the question (in bold) below:You enjoy consuming apples (A) and oranges (O). Suppose that your utility function over both goods is givenby. Your marginal utility function for apples is. Your marginal utility function for oranges isU (A,O) = A0³MUA=MUO =0³3A0²Currently, the price of apples is $10/peck, the price of oranges is $5/pound, and your income is $160.Assume that apples are your horizontal axis good and oranges are your vertical axis good.Let's say the price of oranges rises to $10/pound of oranges.Can you still afford your optimal bundle at the original consumer equilibrium (when theprice of oranges was $5/pound)? [Select]When you set up the optimal decision rule for your new consumer problem (after the pricechange), which of the following statements best describes how much you will buy of applesand oranges at your new consumer equilibrium? [Select]

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Answered: Please refer to the following…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Options:

1. A) Yes, you can still afford the bundle at your previous consumer equilibrium B) No, you now cannot afford the bundle at your previous consumer equilibrium C) It is uncertain whether or not you can still afford the bundle at your previous consumer equilibrium

2. A) For each peck of apples, you will buy 1/3 pounds of oranges B)For each peck of apples, you will buy 1 pounds of oranges C)For each peck of apples, you will buy 3 pounds of oranges D) For each peck of apples, you will buy 6 pounds of oranges

Please refer to the following information to answer the question (in bold) below:
You enjoy consuming apples (A) and oranges (O). Suppose that your utility function over both goods is given
by
. Your marginal utility function for apples is
. Your marginal utility function for oranges is
U (A,O) = A0³
MUA
=
MUO =
0³
3A0²
Currently, the price of apples is $10/peck, the price of oranges is $5/pound, and your income is $160.
Assume that apples are your horizontal axis good and oranges are your vertical axis good.
Let's say the price of oranges rises to $10/pound of oranges.
Can you still afford your optimal bundle at the original consumer equilibrium (when the
price of oranges was $5/pound)? [Select]
When you set up the optimal decision rule for your new consumer problem (after the price
change), which of the following statements best describes how much you will buy of apples
and oranges at your new consumer equilibrium? [Select]

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