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. This means that, in order to buy two bananas, this consumer must forgo
A)1 apple.
B)1.5 apples.
C)0.5 apples.
D)0.75 apples.

Question

Quizplus · Accepted Answer

Two bananas cost $1.50, which is the same as the cost of one apple, indicating that the consumer must forgo 1 apple to buy 2 bananas.

Assume That a Consumer Has a Given Budget or Income