Complete question:
The marginal utility of the last unit of apples consumed is 12 and the marginal utility of the last unit of bananas consumed is 8. What set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium
a. $8 and $12
b. $6 and $4
c. $16 and $9
d. $4 and $6
Answer:
$6 and $4 set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium.
Explanation:
Given,
The marginal utility of the last unit of apples consumed = 12
The marginal utility of the last unit of bananas consumed = 8
Now ,
To find :
The market level for apples and bananas, respectively, will be compatible with the consumer's equilibrium:
= [tex]\frac{12}{3}[/tex] = $6
= [tex]\frac{8}{2}[/tex] = $4
$6 and $4 set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium.
The correct question is as follows:
The marginal utility of the last unit of apples consumed is 12 and the marginal utility of the last unit of bananas consumed is 8. What set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium
a. $8 and $12
b. $6 and $4
c. $16 and $9
d. $4 and $6
The set of prices which would be consistent with consumer equilibrium will be: Choice B: $6 and $4 respectively.
Discussion:
The market price for apples and bananas which, will be consistent with the consumer's equilibrium can be evaluated as follows;
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