Question

Assume that the price of oranges increases to $2, while the price of apples remains at $1, and Linda allocates $5 of the weekly food budget to purchasing apples and oranges. If Linda wants to maximize her utility, her new consumption bundle will consist of a. 1 apple and 2 oranges. b. 3 apples and 1 orange. c. 5 apples and no oranges. d. none of the above

Answer 1

The correct option is B

Step-by-step explanation:

When making a purchase a consumer attempts to get the greatest value possible from expenditure of least amount of money, this is the economic concept of maximizing utility. To maximize the total value derived from the available money.