Asked by
Prince Quayson
on Oct 14, 2024
Verified
Walt consumes strawberries and cream but only in the fixed ratio of three boxes of strawberries to two cartons of cream.At any other ratio, the excess goods are totally useless to him.The cost of a box of strawberries is $10 and the cost of a carton of cream is $10.Walt's income is $200.
A) Walt demands 10 cartons of cream.
B) Walt demands 10 boxes of strawberries.
C) Walt considers strawberries and cartons of cream to be perfect substitutes.
D) Walt demands 12 boxes of strawberries.
E) None of the above.
Fixed Ratio
A quantitative relationship between two or more variables where one variable is a fixed multiple of the others, often used to describe proportional relationships in finance and engineering.
Excess Goods
Products that exceed the demand in the market, often leading to surplus and potential waste.
Perfect Substitutes
Two goods that could be used in place of one another with no loss of utility to the consumer.
- Comprehend the fundamental principles of consumer demand and utility functions.
- Recognize the characteristics of different goods categories and their respective demand curves, such as Giffen goods and substitute products.
Verified Answer
NQ
Learning Objectives
- Comprehend the fundamental principles of consumer demand and utility functions.
- Recognize the characteristics of different goods categories and their respective demand curves, such as Giffen goods and substitute products.