Suppose that Jon is purchasing the optimal amounts of apples and oranges.The marginal utility of the last apple is 8 and of the last orange is 6.If the price of an apple is $1,what must be the price of an orange?
A)50 cents.
B)75 cents.
C)$1.33.
D)$1.40.
E)Cannot be determined from this information.

Question

Quizplus · Accepted Answer

In order for Jon to be purchasing the optimal combination of apples and oranges, the marginal utility per dollar spent must be equal for both fruits. 
Therefore, the marginal utility per dollar of an apple is 8/1 = 8, and the marginal utility per dollar of an orange must also be 8. If x is the price of an orange, then we can set up the equation: 
6/x = 8/1 
Solving for x, we get x = $0.75. Therefore, the price of an orange must be 75 cents.

Suppose That Jon Is Purchasing the Optimal Amounts of Apples