I just need Part B Vicki consumes only Apples (A) and Banana (B). She revealed t

Question

I just need Part B

Vicki consumes only Apples (A) and Banana (B). She revealed that her income was $100, and the price o f A is known to be $2. It is observed that Vicki spent all her income and bought 20 Apples and 20 Bananas.? Answer the following: a) Graphically illustrate Vicki's budget constraint. Be sure to show as much information as possible, and show all calculations. b) Vicki is at her "optimal" choice. And she confided in you that she (right now) can get 10 additional utiles from two more units o f apples. What is her MUA? What about her MUB? c) Suppose the price o f Apples rose to $3, while the price of Bananas became $4. Graphically illustrate Vicki's budget constraint now. What can you say about her original consumption choice of 20 Apples and 20 Bananas?

Explanation / Answer

Vicky is at optimal choice , therefore, MUa = MUb.

Now, since two units of A gives utility equal to 2 utils then 1 unit gives utility equal to 5, thus MU a= MU b = 5

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