Question
1. Consider a consumer spending his weekly budget on two goods, apples (A) and bananas (B). The price of apples is $4 per pound and
1. Consider a consumer spending his weekly budget on two goods, apples (A) and bananas (B). The price of apples is $4 per pound and the price of bananas is $5 per pound. Consumer's budget is $100 per week. (a) an equation describing the consumer's budget line and (b) describe it on a diagram measuring apples (A) on the horizontal axis. (Part A)
2. Continuing from the previous question, suppose the consumer has the following utility function: ((,)=+) . Draw his indifference map on a diagram measuring apples (A) on the horizontal axis. (Part B)
3. Continuing from the previous two questions, how many pounds of bananas does the consumer purchase? Please write the value (number) only. No unit is required (no need to write "pounds" at the end). If your answer is a decimal number , then please round it at one decimal place (Part C)
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