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Suppose Sue considers orange and apple to be perfect two-for-three substitutes and spends $30 income only...

Suppose Sue considers orange and apple to be perfect two-for-three substitutes and spends $30 income only on these two goods. Orange costs $2/lb, while apple costs $1/lb. Find Sue's optimal consumption bundle. What will be the income and substitution effects of an increase in the price of apple to $2/lb? What will be Sue's optimal consumption bundle after the increase in the price of apple to $2/lb?

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Answer #1

年一一一一 etEA (at -- an anae Du D 깃 Pi 2- Py 2.

30-tFo = 60 2 2. ain MRS = 3.py_1 2Py MAS 60 2 30

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