Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. If the consumer spent all of her budget on just apples or just bananas, how many apples or bananas maximum would she be able to buy?
A)12 apples or 8 bananas
B)8 apples or 12 bananas
C)16 apples or 12 bananas
D)8 apples or 16 bananas

Question

Quizplus · Accepted Answer

With a budget of $12, the consumer could buy 8 apples ($12 / $1.50 each) or 16 bananas ($12 / $0.75 each).

Assume That a Consumer Has a Given Budget or Income