Tim Gets Constant Marginal Utility of 4 Utils from Eating

question 48

Essay

Tim gets constant marginal utility of 4 utils from eating apples and a constant marginal utility of 5 utils from eating bananas.In other words,he considers them perfect substitutes and is willing to substitute 5 apples for 4 bananas and remain equally well off.He has $10 to spend on apples and bananas.The price of bananas is $1.Assume he can consume fractional amounts.Plot the demand curve for apples.(Hint: consider several different prices for apples. )

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Definitions:

Standard Deviation

A measure of the dispersion or variation in a set of values, indicating how much the values differ from the mean.

Bottling Machine

A mechanical device or production line used for filling bottles with liquids, such as beverages, automatically or semi-automatically.

Normally Distributed

Describes a distribution of data that follows a bell curve, where most occurrences take place near the mean.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how spread out the values are from the mean.