Economics 9708 · AS & A Level · Utility and rational consumer behaviour

Utility and rational consumer behaviour — practice question

A household buys the following fruit: bananas 5 kg at $1.00 per kg; apples 10 kg at $0.50 per kg. The utility from the tenth kg of apples is twice the utility from the fifth kg of bananas. What action should the household take to maximise utility from buying these fruits?

  • Apurchase of bananas: decrease; purchase of apples: increase
  • Bpurchase of bananas: increase; purchase of apples: decrease
  • Cpurchase of bananas: increase; purchase of apples: increase
  • Dpurchase of bananas: no change; purchase of apples: no change

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