2. Suppose Arda's utility for apples (A) and oranges (0) can be represented as U=A+20.-
a) Draw the indifference curve that yields a utility level 5.
b) Calculate MUA, MUO, and MRS of A for 0 on that indifference curve.
c) They have $5 per week for apples and oranges. Pa= $1/pound and Po= $2/pound.
How much apples and oranges would they consume a week? Show on the graph.
d) Suppose now Pa= $1/pound and Po= $2.5/pound. Find their optimal consumption
bundle. Show on the graph.
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2. Suppose Arda's utility for apples (A) and oranges (0) can be represented as U=A+20.-
a) Draw th...
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