When the price of a muffin rises to $1.50 and the price of coffee falls to $1.75 a cup, Jim able to buy 10 muffins and 20 coffees. Jim A. is; does not buy this combination because the marginal rate of substitution has changed. O B. is; buys this combination because the marginal rate of substitution has not changed. O C. is not; does not buy this combination because with the change in price he can no longer buy 2 cups of coffee to drink with each muffin O D. is not; does not buy this combination because he can't afford it Jim prefers to buy O A. muffins at $1.50 and coffee at $1.75 a cup OB. muffins at $1 and coffee at $2 a cup
When the price of a muffin rises to $1.50 and the price of coffee falls to $1.75 a cup, Jim able to buy 10 muffins and 20 coffees. Jim A. is; does not buy this combination because the marginal rate of substitution has changed. O B. is; buys this combination because the marginal rate of substitution has not changed. O C. is not; does not buy this combination because with the change in price he can no longer buy 2 cups of coffee to drink with each muffin O D. is not; does not buy this combination because he can't afford it Jim prefers to buy O A. muffins at $1.50 and coffee at $1.75 a cup OB. muffins at $1 and coffee at $2 a cup
Chapter10: Consumer Choice Theory
Section: Chapter Questions
Problem 8P
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