-24. Joe is currently consumed yielded 8 utils and the last piece of cheese cons

Question

-24. Joe is currently consumed yielded 8 utils and the last piece of cheese consumed yielded 12 utils. A crackers is two cents per cracker an increases to four cents, Joe should crackers will y in consumer equilibrium by consuming cheese and crackers c d the price of cheese is three cents per piece. If the price of crackers D. increase, increase; decrease; decrease c. increase, decrease, increase, decrease his consumption of crackers and his marginal utility from his consumption of cheese and his marginal utility from such that the last cracker Assume the price of e. decrease; increase; increase; decrease

Explanation / Answer

MU/P for cracker = 8/4 = 2

MU/P for cheese = 12/3 = 4

After price rise, MU/P from cracker < MU/P from cheese

So, Joe should reduce its consumption of crackers and MU from crackers increases to reach equilibrium

It must increase its consumption of cheese and MU from cheese decrease to reach equilibrium

Thus correct option: (e)

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