The real interest rate is equal to the:_________
1 answer:
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Answer:
2 apples and 6 bottles of water
Explanation:
since Bervin earns K22, her consumption possibilities frontier is:
apple water total utils obtained
4 units 1 unit 90 + 20 = 110 utils
3 units 3 units 75 + 54 = 129 utils
2 units 6 units 55 + 90 = 145 utils
1 unit 8 units 30 + 98* = 128 utils
0 units 11 units 0 + 98* = 98 utils
The optimal combination of apples and bottles of water is 2 apples and 6 bottles of water because that combination yields the most utils.
*Since the table only states the utils obtained until the 7th unit, we must assume that any additional unit consumed will provide 0 utils.
