Question

Walt consumes strawberries and cream but only in the xed ratio of three boxes of strawber-

ries 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.

Which of the following is true? (Please show work or explain, i already know the answer, just need to know how to get there)

(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

Answer 1

(d) Walt demands 12 boxes of strawberries.

Step-by-step explanation:

For every 3 box of strawberries, Walt consumes 2 box of cream

=> For every 1 box of strawberry, he will consumer 2/3 box of cream

Suppose, he consumes X boxes of strawberries, then he must consume (2/3)*X boxes of cream

Cost = 10*X + 10*(2/3)*X = 200 = Income

=> 10X + 20X/3 = 200

=. 30X + 20X = 600

=> 50X = 600

=> X = 12