The diagram below shows one of Popeye's indifference curves (relating bottles of pure olive oil to cans of spinach) and his (annual) budget line. a. Olive Oil 30 20 18 35 Spinach If the price of olive oil is $18 per bottle, what then must be the price per can of spinach? Please express your answer to the nearest penny (one-hundredth of a dollar). b. Where does the budget line intersect the spinach axis? That is, to the nearest whole number, what is the maximum number of cans of spinach Popeye could purchase? C. If the marginal utility of that 35th can of spinach is 40 (utils), what then is the marginal utility of the 20th bottle of olive oil?
The diagram below shows one of Popeye's indifference curves (relating bottles of pure olive oil to cans of spinach) and his (annual) budget line. a. Olive Oil 30 20 18 35 Spinach If the price of olive oil is $18 per bottle, what then must be the price per can of spinach? Please express your answer to the nearest penny (one-hundredth of a dollar). b. Where does the budget line intersect the spinach axis? That is, to the nearest whole number, what is the maximum number of cans of spinach Popeye could purchase? C. If the marginal utility of that 35th can of spinach is 40 (utils), what then is the marginal utility of the 20th bottle of olive oil?
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 5SQP
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Transcribed Image Text:The diagram below shows one of Popeye's indifference curves (relating bottles of pure
olive oil to cans of spinach) and his (annual) budget line.
a.
Olive Oil
30
20
18
35
Spinach
If the price of olive oil is $18 per bottle, what then must be the price per can of spinach?
Please express your answer to the nearest penny (one-hundredth of a dollar).
b. Where does the budget line intersect the spinach axis? That is, to the nearest whole number,
what is the maximum number of cans of spinach Popeye could purchase?
C.
If the marginal utility of that 35th can of spinach is 40 (utils), what then is the marginal utility
of the 20th bottle of olive oil?
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