Albert Consumes Only Tangerines and Bananas

question 46

Multiple Choice

Albert consumes only tangerines and bananas.His only source of income is an initial endowment of 30 units of tangerines and 10 units of bananas.Albert insists on consuming tangerines and bananas in fixed proportions, 1 unit of tangerines per 1 unit of bananas.He initially faces a price of $10 per unit for each fruit.The price of tangerines rose to $30 per unit while the price of bananas stayed unchanged.After the price change, he would

• A)increase his consumption of tangerines by exactly 5 units.
• B)decrease his consumption or tangerines by at least 5 units.
• C)increase his consumption of tangerines by exactly 15 units.
• D)decrease his consumption of tangerines by exactly 7 units.
• E)decrease his consumption of bananas by at least 1 unit.

---

Definitions:

Short Run

A period in economics during which at least one input (like factory size) is fixed and cannot be changed, contrasting with the long run where all inputs can be varied.

Industry

is the aggregate of manufacturing or technically productive enterprises in a particular field, characterized by the goods or services they produce.

Horizontal Demand Curve

A graphical representation of a market where the quantity demanded changes significantly while the price remains constant.

Perfect Competitor

A theoretical economic concept where an individual firm cannot influence the market price of the good or service it produces.