Asked by
Izabel Kerschen
on Oct 08, 2024
Verified
The marginal utility of the last unit of apples consumed is 12 and the marginal utility of the last unit of bananas consumed is 8.What set of prices for apples and bananas,respectively,would be consistent with consumer equilibrium?
A) $4 and $6
B) $6 and $4
C) $8 and $12
D) $16 and $9
Consumer Equilibrium
A state where an individual allocates their income in a way that maximizes their utility, given their budget constraints.
Marginal Utility
The extra pleasure or benefit a consumer receives from using an additional unit of a product or service.
Equilibrium Prices
The price at which the quantity of goods supplied is equal to the quantity of goods demanded.
- Understand the principle of consumer equilibrium and the role of marginal utility in making consumption choices.
- Interpret and calculate optimal consumption bundles based on marginal utility per dollar spent.
Verified Answer
JH
Learning Objectives
- Understand the principle of consumer equilibrium and the role of marginal utility in making consumption choices.
- Interpret and calculate optimal consumption bundles based on marginal utility per dollar spent.