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 $2 per pound, the price of oranges is $3 per pound, and Bob's budget is $30 per week. What is Bob's utility maximizing choice between these two goods? A) 10 pounds of oranges and no apples B) 15 pounds of apples and no oranges C) 5 pounds of apples and 5 pounds of oranges D) 4 pounds of apples and 6 pounds of oranges E) none of the above
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 $2 per pound, the price of oranges is $3 per pound, and Bob's budget is $30 per week. What is Bob's utility maximizing choice between these two goods? A) 10 pounds of oranges and no apples B) 15 pounds of apples and no oranges C) 5 pounds of apples and 5 pounds of oranges D) 4 pounds of apples and 6 pounds of oranges E) none of the above
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 11SQ
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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 $2 per pound, the price of oranges is $3 per pound, and Bob's budget is
$30 per week. What is Bob's utility maximizing choice between these two goods?
A) 10 pounds of oranges and no apples
B) 15 pounds of apples and no oranges
C) 5 pounds of apples and 5 pounds of oranges
D) 4 pounds of apples and 6 pounds of oranges
E) none of the above
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