Explain if it is possible to be technically efficient or not.

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Chapter 12, Problem 3QE

(a)

To determine

Explain if it is possible to be technically efficient or not.

(b)

To determine

Explain if both methods are possible to be economically efficient or not.

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1. Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer. State the condition for a consumer's utility maximizing choice and illustrate graphically.