Caroline Sierra Loves to Eat Raspberry-Apple Cobblers, but Will Only

question 6

Multiple Choice

Caroline Sierra loves to eat raspberry-apple cobblers, but will only do so if the raspberries and apples are used in the ratio of 3 ounces of raspberries to 2 ounces of apples. Assume that each cobbler uses exactly 3 ounces of raspberries and 2 ounces of apples. Each cobbler eaten yields 1 unit of utility, and the utility of cobblers is linear in the number eaten. Say the price of raspberries is $5 per ounce and the price of apples is $2 per ounce. It costs $190 to achieve a utility level of 10. Then a tax is placed on raspberries so that their price increases from $5 to $10 per ounce. What is the price-compensating variation?

• A) $340
• B) $150
• C) $260

---

Definitions:

Leukemia

A kind of cancer impacting the blood and bone marrow, marked by the excessive production of atypical white blood cells.

Diagnosis

The identification of the nature and cause of a certain phenomenon, often used in the context of medical conditions.

Terminal Illnesses

Diseases or conditions that are incurable and irreversible and are expected to result in the death of the patient within a short period of time.

Kübler-Ross's Stages

A framework outlining five stages of grief (denial, anger, bargaining, depression, acceptance) people go through in dealing with the emotional impact of loss or death.