Suppose Jim considers orange and apple to be perfect two-for-three

Suppose Jim considers orange and apple to be perfect two-for-three

only one question

.Suppose Jim considers orange and apple to be perfect two-for-three substitutes and spends $60 income only on these two goods. Orange costs $4/lb, while apple costs $2/lb. Find Jim’s optimal consumption bundle. What will be the income and substitution effects of an increase in the price of apple to $4/lb? What will be Jim’s optimal consumption bundle after the increase in the price of apple to $4/lb?

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O: A = 2:3. Price of oranges = $4. Price of apples = $2. O: A = 4 x 2 : 3 x 2. =8: 6. Optimal bundle = 60/2. Optimal bundle = $30 lb. Optimal bundle for oranges = 0. Optimal bundle for apples = 30 lb. When the price of apples increases to $4 lb then. O: A = 4 x 2 < 3 x 2.O: A = 2:3. Price of oranges = $4. Price of apples = $2. O: A = 4 x 2 : 3 x 2. =8: 6. Optimal bundle = 60/2. Optimal bundle = $30 lb. Optimal bundle for oranges = 0. Optimal bundle for apples = 30 lb. When the price of apples increases to $4 lb then. O: A = 4 x 2 < 3 x 2.O: A = 2:3. Price of oranges = $4. Price of apples = $2. O: A = 4 x 2 : 3 x 2. =8: 6. Optimal bundle = 60/2. Optimal bundle = $30 lb. Optimal bundle for oranges = 0. Optimal bundle for apples = 30 lb. When the price of apples increases to $4 lb then. O: A = 4 x 2 < 3 x 2.O: A = 2:3. Price of oranges = $4. Price of apples = $2. O: A = 4 x 2 : 3 x 2. =8: 6. Optimal bundle = 60/2. Optimal bundle = $30 lb. Optimal bundle for oranges = 0. Optimal bundle for apples = 30 lb. When the price of apples increases to $4 lb then. O: A = 4 x 2 < 3 x 2………………………..

APA 200 words