Question

1) MCQ

Option A)

At Utility Maximization : MU/P is Equalized across all goods

At current combination

MUC/PC = 12/1 IS NOT EQUAL TO MUf/Pf = 12/2 = 6

& As MUc/Pc > MUf/Pf

So consume more C than F

 Combination C MUc/Pc F MUf/Pf consumer eqm A 20 16 30 5 No B 40 8 20 6 No C 30 12 30 5 No Download 50 4 40 4 yes

Budget : 130

At eqm, MUc/Pc = MUf/Pf

MUc/MUf = Pc/Pf = 1/2

BC: C + 2F = 130

& C/F = 50/40 = 5/4 = 1.25

put, C = 1.25F

3.25F = 130

F* = 40

C* = 50

​​​

Cheese : 50 pound

Fruits : 40 pound

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