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Alfredo Lives on Apples and Bananas Only

Question 64

Multiple Choice

Alfredo lives on apples and bananas only. His utility function is U(a, b) = min{a + b, 2b}. He maximizes his utility subject to his budget constraint and consumes the bundle (a, b) = (4, 4) .


A) pa > pb.
B) pa is less than or equal to pb.
C) pa = pb.
D) pa = 2pb.
E) None of the above.

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