Aisha and Asmaa both purchase milk and bread at the same Quik Mart. They have different preferences for milk and eggs and different incomes. They both buy some milk and some bread, but they buy considerably different quantities of the two goods. Which of the following statements is true, given that Aisha and Asmaa are utility -maximizers?
A) In equilibrium, their marginal rate of substitution between milk and bread is the same.
B) In equilibrium, the marginal rate of substitution between milk and bread is greater for the person who prefers milk more than bread.
C) No statement can be made about their respective marginal rate of substitution without their budget constraint/indifference curves diagrams.
D) In equilibrium, their marginal rate of substitution between milk and bread is higher for the person with the higher income.
Correct Answer:
Verified
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