Bob views apples and oranges as perfect substitutes in his ...

[viki]

Bob views apples and oranges as perfect substitutes in his consumption, and MRS = 1 for all combinations of the two goods in his indifference map.
 
  Suppose the price of apples is 2 per pound, the price of oranges is 3 per pound, and Bob's budget is 30 per week. What is Bob's utility maximizing choice between these two goods? A) 4 pounds of apples and 6 pounds of oranges
  B) 5 pounds of apples and 5 pounds of oranges
  C) 10 pounds of oranges and no apples
  D) 15 pounds of apples and no oranges
  E) none of the above

Question 2

When an industry's raw material costs increase, other things remaining the same,
 
  A) the supply curve shifts to the left.
  B) the supply curve shifts to the right.
  C) output increases regardless of the market price and the supply curve shifts upward.
  D) output decreases and the market price also decreases.

[lorealeza]

Answer to Question 1

D

Answer to Question 2

A