Please help and explain why. 27 Consider a person with utility for apples and ba

Question

Please help and explain why.

27 Consider a person with utility for apples and bananas U(A,B) 2A +3B. If both apples and bananas cost fifty cents each, then the person will consume a. an equal number of bananas and apples b. only apples. c. only bananas d. more bananas than apples but at least some apples. e. none of the above. a person with utility for ham and cheese U(H,C) Consider following statements is true? a. This person will only consume ham if ham is less expensive than cheese. b. This person will only consume cheese if ham is more expensive than cheese c. This person will only consume equal amount of ham and cheese. d. This person will consume twice as much ham as cheesc. e. This person will consume twice as much cheese as ham. Min(H,C). Which of the

Explanation / Answer

27) MRS = MUA/MUB = 2/3 = 0.67

PA/PB = 0.5/0.5 = 1

Since, Price ratio is greater than MRS so consumer will consume only good B.

Answer is c) only bananas

28) From utility function; we get H = C

This implies consumer will consume equal amount of both goods.

Answer is c) This person will only consume equal amount of ham and cheese.

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