If we graph Mary Granola's indifference curves with avocados on the horizontal axis and grapefruits on the vertical axis, then whenever she has more grapefruits than avocados, the slope of her indifference curve is 22. Whenever she has more avocados than grapefruits, the slope is . Mary would be indifferent between a bundle with 22 avocados and 37 grapefruits and another bundle that has 37 avocados and
A) 27 grapefruits.
B) 32 grapefruits.
C) 17 grapefruits.
D) 22 grapefruits.
E) 24.5 grapefruits.

Question

If we graph Mary Granola's indifference curves with avocados on the horizontal axis and grapefruits on the vertical axis, then whenever she has more grapefruits than avocados, the slope of her indifference curve is 22. Whenever she has more avocados than grapefruits, the slope is  . Mary would be indifferent between a bundle with 22 avocados and 37 grapefruits and another bundle that has 37 avocados and
A) 27 grapefruits. 
B) 32 grapefruits. 
C) 17 grapefruits. 
D) 22 grapefruits. 
E) 24.5 grapefruits.

Quizplus · Accepted Answer

We know that whenever Mary has more grapefruits than avocados, the slope of her indifference curve is 22, which means that the marginal rate of substitution (MRS) of grapefruits for avocados is 22. Similarly, whenever Mary has more avocados than grapefruits, the slope is 11ea6c55_6e08_0272_9875_39ae7d10d7ae_TB6162_11, which means that the MRS of grapefruits for avocados is 11.
Thus, in order for Mary to be indifferent between a bundle with 22 avocados and 37 grapefruits and another bundle that has 37 avocados, the MRS of grapefruits for avocados in both bundles should be equal to 22.
Let x be the number of grapefruits in the second bundle. Then, we can set up the following equation based on the information given:
MRS = (Change in grapefruits)/(Change in avocados) = 22 = (x-37)/(37-22)
Solving for x, we get x = 22 grapefruits. Therefore, Mary would be indifferent between a bundle with 22 avocados and 37 grapefruits and another bundle that has 37 avocados and 22 grapefruits.

If We Graph Mary Granola's Indifference Curves with Avocados on the Horizontal