Question

Leo consumes only apples and bananas. He always prefers more apples to fewer, but he sometimes gets tired of bananas. If he consumes fewer than 24 bananas per week, he thinks that 1 banana is a perfect substitute for 1 apple. But people may have to pay him 1 apple for each banana beyond 24 that he consumes. The indifference curve that passes through the consumption bundle with 31 apples and 36 bananas also passes through the bundle with A apples and 18 bananas, where A equals:________.
a) 29
b) 23
c) 31
d) 25
e) none of the above

Answer 1

Answer:

The correct answer to the following question will be Option d (25).

Explanation:

Unless we are eating 31 apples as well as 36 bananas, we are indeed being compensated apples to consume upwards of 24 bananas. We consumed 12 more bananas than that of the 24, and that we were paying 12 apples. That implies that we would be ignorant (31 apples including 36 bananas) to (19 apples including 24 bananas).

19 Is 31 we continued from, except the 12 we got billed. Currently, bananas, as well as, apples are good replacements.

So now we have,

⇒ 19 + 24

⇒ 43 usefulness.

Although we feed 18 bananas, we require 25 apples to be comparable to 43 usefulness. So that "25" is the right answer.