Which is the correct answer ? Suppose there are 10 apples and 10 oranges in the economy. Joe is currently consuming 4 apples and 5 oranges, and Jane is consuming 6 apples and 5 oranges. At this allocation, Joe's marginal utility of apples is 3, and his marginal utility of oranges is 5. Jane's marginal utility of apples is 6, and her marginal utility of oranges is 10. The current price of apples is R4 per unit and the current price of oranges is R5 per unit. To reach a competitive equilibrium, the required price adjustment is: A. A decrease in the orange price relative to the apple price. B. A decrease in the apple price relative to the orange price. C. No change in the relative prices. D. An increase in both prices.

Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…

A: Utility refers to the total amount of satisfaction that derived from the consumption of goods and…

Q: A person has $25 to spend on apples, bananas, and cherries. Their respective prices are $2, $3, and…

A: The budget constraint for a person spending $25 on apples, bananas, and cherries, with prices of $2,…

Q: Mattie consumes milk and cookies. Assume Mattie has a strictly diminishing marginal rate of…

A: Utility refers that the wants satisfying power of any commodity , diminishing marginal rate of…

Q: Question 1. Below are the choices made by Albert, Brittney, and Calvin when choosing from different…

A: Since you have posted a question with multiple sub parts, we will provide the solution only to the…

Q: The following table shows Madison's utility from consuming popcorn and Coke. Suppose that Madison…

A: Madison's income is $14.00The price of popcorn is $4.00 per box and the price of Coke is $3 per can.…

Q: Each month Larry purchases household utilities. His preferences over gallons of heating oil (x) and…

A: A want satisfying power of a commodity or service is known as its utility. Utility is a significant…

Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…

A: Given Information: The budget of Person A is £21 to spend on toothbrushes and toothpaste. The price…

Q: Consider the following economy with two goods, x and y, and two consumers, A and B. The tastes of…

A: Pareto -efficient points refers to those equilibrium points deviating from which no person can be…

Q: A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a…

A: The budget line demonstrates the available budget of the college student. It illustrates the maximum…

Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…

A: Income and consumption curve shows the relationship between the level of income and consumption of…

Q: The first graph presents the utility maximizing combinations of bread and brie that Hayden chooses…

A: Price of bread=$1 per loafThe price of brie could either be: $4 or $6 per wheel

Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…

A:

Q: Donna and Jim are two consumers purchasing strawberries and chocolate. Jim’s utility function is…

A: MUx (for Jim) = y MUy (for Jim) = xPx = $2     and  Py = $4   ( as given in another subpart of…

Q: Pedro, a retired economics professor, grows lemons and oranges in his back- yard. He consumes some…

A: Given information Pedro's utility function  U= Min(X,Y) An endowment of lemon (X)=20 pounds…

Q: Problem 1 Ava has an income of $1,500 and she spends her income on two goods (1 and 2). Her utility…

A: Optimal consumption bundle: The optimal consumption bundle is such that at that bundle the…

Q: Avery is currently using up the entire weekly budget she has allocated to purchasing Goods X and Y.…

A: Given  Marginal utility on last unit of good X  that Avery buy by using weekly income = 14 and last…

Q: Why in this question is consumer surplus equal to the utility gained from consumption?

A: The consumer surplus concept is derived from and based on the diminishing marginal utility law.…

Q: Suppose Lucia has to choose between purchasing high-definition televisions and water. Which of the…

A: The process by which individuals or households allocate their limited resources (such as income or…

Q: Let's assume that Justin Trudeau, who lives in Ottawa, is purchasing corn (C) and dandelion (D) in…

A: The utility is maximum when both goods are purchased at equal marginal utility per dollar.

Q: The tables show the utility Parker experienced from consuming varying quantities of waffles and…

A: Parker utility maximization will take place at the point when marginal utility per dollar of waffles…

Q: Andrea has a budget of £21 to spend on toothbrushes and tooth paste. He does not receive any utility…

A: Utility refers to the total amount of satisfaction that derived from the consumption of goods and…

Q: Suppose Craig considers oranges and grapefruits to be perfect substitutes. Craig is willing to trade…

A: A utility function is a measurable depiction of a person's preferences while consuming various goods…

Q: Antonio likes to have coffee (C) and donuts (D) for breakfast every morning. He likes to dip his…

A: For every cup of coffee, Antonio eats 1.5 donuts. This preference represents that coffee and donuts…

Q: Calculate the Marginal Utility of Y What is the optimal Choice of X and Y given the PX = $6, PY = $2…

A: Marginal utility is the added satisfaction that a consumer gets from having one more unit of a good…

Q: Two students, Nick and Sofia, are discussing normal and inferior goods. Nick says that if Frodo buys…

A: According to the question, Nick and Sofia, two students, are debating the differences between…

Q: Suppose an individual is currently spending all of their income on a bundle of books and pizza, but…

A: Good marginal utility price in $ $ marginal utility Book 6 12 6/12 = 0.5 Pizza 3 7 3/7 = 0.43…

Equilibrium Price and Quantity

Equilibrium refers to a state of balance that comes about because there is equality in all forces.