Exhibit 20-3 Refer to Exhibit 20-3. Assume that the price of oranges increases to $2, while the price of apples remains at $1, and Linda allocates $5 of the weekly food budget to purchasing apples and oranges. If Linda wants to maximize her utility, her new consumption bundle will consist of
A)1 apple and 2 oranges.
B)3 apples and 1 orange.
C)5 apples and no oranges.
D)2 apples and 1 orange.

Question

Exhibit 20-3 ​  Refer to Exhibit 20-3. Assume that the price of oranges increases to $2, while the price of apples remains at $1, and Linda allocates $5 of the weekly food budget to purchasing apples and oranges. If Linda wants to maximize her utility, her new consumption bundle will consist of
A)1 apple and 2 oranges. 
B)3 apples and 1 orange. 
C)5 apples and no oranges. 
D)2 apples and 1 orange.

Quizplus · Accepted Answer

The Answer of Exhibit 20-3 ​  Refer to Exhibit 20-3. Assume that the price of oranges increases to $2, while the price of apples remains at $1, and Linda allocates $5 of the weekly food budget to purchasing apples and oranges. If Linda wants to maximize her utility, her new consumption bundle will consist of
A)1 apple and 2 oranges. 
B)3 apples and 1 orange. 
C)5 apples and no oranges. 
D)2 apples and 1 orange.

Exhibit 20-3 ​ Refer to Exhibit 20-3

Exhibit 20-3 Refer to Exhibit 20-3