Bob Views Apples and Oranges as Perfect Substitutes in His

question 28

Multiple Choice

Bob views apples and oranges as perfect substitutes in his consumption, and MRS = 1 for all combinations of the two goods in his indifference map. Suppose the price of apples is $2 per pound, the price of oranges is $3 per pound, and Bob's budget is $30 per week. What is Bob's utility maximizing choice between these two goods?

• A) 4 pounds of apples and 6 pounds of oranges
• B) 5 pounds of apples and 5 pounds of oranges
• C) 10 pounds of oranges and no apples
• D) 15 pounds of apples and no oranges
• E) none of the above

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