Question

Assume that a consumer has a given budget or income of $12, and that she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75.
Refer to the information given above. If the consumer spent all of her budget on just apples or just bananas, how many apples or bananas maximum would she be able to buy?

Answer 1

Answer:

The consumer will either be able to buy 8 apples or 16 bananas with a budget of $12.

Step-by-step explanation:

We are given the following in the question:

Total budget or income = $12

Cost of an apple = $1.50

Cost of a banana = $0.75

The consumer spent all of her budget on just apples or just bananas.

Number of apples purchased =

$=\displaystyle\frac{\text{Total budget}}{\text{Cost of an apple}} = \frac{12}{1.50} = 8$

Numbers of banana purchased =

$=\displaystyle\frac{\text{Total budget}}{\text{Cost of a banana}} = \frac{12}{0.75} = 16$

Thus, the consumer will either be able to buy 8 apples or 16 bananas with a budget of $12.