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Lily Wants to Maximize Her Benefit of Consuming Apples and Bananas

Question 3

Multiple Choice

Lily wants to maximize her benefit of consuming apples and bananas, given her fixed budget of $10 for these two fruits. The price of an apple is $1, and the price of a banana is $0.50. In order to derive Lily?s demand curve for bananas, we need to ________.


A) solve the buyer?s problem for her once, and find the optimal number of bananas, when price of a bananas is $0.50
B) solve the buyer?s problem for her multiple times and find the optimal number of bananas, when price of a bananas is at a different level each time
C) draw a downward sloping line with slope of -1
D) draw a downward sloping line with slope of-2

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