Walt consumes strawberries and cream but only in the fixed ratio of three boxes of strawberries to two cartons of cream.At any other ratio, the excess goods are totally useless to him.The cost of a box of strawberries is $10 and the cost of a carton of cream is $10.Walt's income is $200.
A)Walt demands 10 cartons of cream.
B)Walt demands 10 boxes of strawberries.
C)Walt considers strawberries and cartons of cream to be perfect substitutes.
D)Walt demands 12 boxes of strawberries.
E)None of the above.

Question

Quizplus · Accepted Answer

Since Walt consumes strawberries and cream in the fixed ratio of three boxes of strawberries to two cartons of cream, he will demand 12 boxes of strawberries and 8 cartons of cream (which is equivalent to the fixed ratio). This will cost him $120 for strawberries and $80 for cream, which adds up to $200 and uses up his entire income. Therefore, choice D is the best option.

Walt Consumes Strawberries and Cream but Only in the Fixed