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Assume that strawberries cost $1 and apples cost $2. If a consumer has $16, the bundle of goods that would maximize his utility per dollar and remain within his budget would be:________
a. 6 strawberries and 5 apples.
b. 2 strawberries and 3 apples.
c. 6 strawberries and 1 apples.
d. 0 strawberries and 4 apples.

Respuesta :

Answer:

a. 6 strawberries and 5 apples. 

Explanation:

$16 = 1s + 2a

Where s = strawberry and a = Apple

The above equation represents a budget constraint.

The bundle that would maximise utility:

$16 = 1(6) + 2(5)

16 = 6 + 10

I hope my answer helps you

jepessoa

Answer:

A) 6 strawberries and 5 apples.

Explanation:

If you have $16, your consumption  possibilities frontier would be 8 apples or 16 strawberries, but other possible combinations include:

apples                        strawberries

  8                                        0

  7                                         2

  6                                         4

  5                                         6

  4                                         8

  3                                         10

  2                                         12

  1                                          14

  0                                         16

Any of the above combinations should maximize the consumer's utility and remain within his budget.  

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