Oranges 25 ad b 20 Apples -lo In the diagram, suppose the consumer is currently exhausting his or her income at a point where the marginal rate of substitution of apples for oranges is greater than 5/4. That is, MUA+MU > 5/4. To maximize utility, the consumer should move from point A Od to e. O a to e. Ob to e. Octo e.

Principles of Economics, 7th Edition (MindTap Course List)
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Author:N. Gregory Mankiw
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Chapter21: The Theory Of Consumer Choice
Section: Chapter Questions
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do fast

Oranges
25
0
D
b
C
lo
20
Apples
In the diagram, suppose the consumer is currently exhausting his or her income at a point where the marginal rate of substitution of apples for
oranges is greater than 5/4. That is, MUA+MU > 5/4. To maximize utility, the consumer should move from point
Od to e.
O a to e.
Ob to e.
Octo e.
Transcribed Image Text:Oranges 25 0 D b C lo 20 Apples In the diagram, suppose the consumer is currently exhausting his or her income at a point where the marginal rate of substitution of apples for oranges is greater than 5/4. That is, MUA+MU > 5/4. To maximize utility, the consumer should move from point Od to e. O a to e. Ob to e. Octo e.
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