There are two goods, apples and bananas. The price of apples is PA = $2,and the price of bananas is PB = $3. A consumer has $120 to spend, and his utility function is U(A,B)=2A2B3a) With apples on the x axis, the slope of the budget line is ________b) At A=2, B=1, the marginal utility of A is and the marginal utility of B is ________c) At the optimal bundle, the consumer buys apples and bananas ______

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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There are two goods, apples and bananas. The price of apples is P_A = $2,and the price of bananas is P_B = $3. A consumer has $120 to spend, and his utility function is U(A,B)=2A²B³

a) With apples on the x axis, the slope of the budget line is ________

b) At A=2, B=1, the marginal utility of A is and the marginal utility of B is ________

c) At the optimal bundle, the consumer buys apples and bananas ______

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