a. Suppose you’d like to do five different things, each of which requires exactly one orange. Complete the following table, ranking your highest valued orange-related activity (1) to your lowest valued activity (5).
ActivityRank of Preference
Give a friend the orange. …………………………………………………………
Throw the orange at a person you don’t like. ……………………………............
Eat the orange. …………………………………………………………………..
Squeeze the orange to drink the juice. …………………………………………..
Use the orange as decorative fruit. ………………………………………………
b. Suppose the price per orange is high enough that you buy only four. What activity do you not do?
c. How low would the price of oranges have to fall for you to purchase five oranges? What does the price at which you would just purchase the fifth orange tell us about the value you receive from the fifth-ranked activity?