Refer to the figure above, which shows Leo\'s budget constraint for potatoes and
ID: 1196164 • Letter: R
Question
Refer to the figure above, which shows Leo's budget constraint for potatoes and cucumbers along with one of his indifference curves. If Leo has $60 to spend on potatoes and cucumbers, then what's the price of cucumbers? Pc = $4 Pc = $6 Pc = $10 Pc = $15 Ans: A Refer to the figure above, which shows Leo's budget constraint for potatoes and cucumbers along with one of his indifference curves. When Leo consumes 6 cucumbers and 6 potatoes, he is willing to give up to get another cucumber. 1 potato 2/3 of a potato less than 2/3 of a potato more than 2/3 of a potato Ans: D Refer to the figure above, which shows Leo's budget constraint for potatoes and cucumbers along with one of his indifference curves. At Leo's optimal consumption bundle (which is not explicitly labeled in the figure), if his marginal utility from consuming a cucumber is 24 utils, then his marginal utility from consuming a potato must be: 36 utils 24 utils 16 utils 42 utils Ans: A Can someone explains the second and the third question ? I don't get why.Explanation / Answer
Price of potatoes: Pp
Price of cucumbers: Pc
Budget constraint: Qp*Pp+QcPc=60,
1: Ans A
At Qp=10, Qc=0,Pp=6
At Qp=0, Qc=15, Pc=4
2: Ans D
Slope of IC=dQp/dQc
Which shows the amount of Qp leaves to gain per unit of Qc.
Slope of budget constraint is 2/3
Slope of IC is more than budget constrain which means leo is willing to give up more than 2/3 potato to get another cucumber.
3. ans A
At optimal point
MRTS=MUc/MUp=slope of BC
24/MUp=2/3
MUp=36