Question: A murder has been committed and there are two suspects. Police know one of the two individuals committed the crime. The police also know that
A murder has been committed and there are two suspects. Police know one of the two individuals committed the crime. The police also know that the suspects preferences have not shifted between the time of the murder and their arrest.
The murderer left a grocery receipt at the murder scene:
Bananas: 4 pounds @ $1/lb. $4.00
Apples: 8 pounds @ $2/lb. $16.00
Total $20.00
The police executed search warrants at the two suspects homes and find a single grocery receipt at each house.
The grocery receipt for Suspect #1:
Bananas: 5 pounds @ $1.50/lb. $7.50
Apples: 9 pounds @ $1.50/lb. $13.50
Total $21.00
The grocery receipt for Suspect #2:
Bananas: 7 pounds @ $1.50/lb. $10.50
Apples: 6 pounds @ $1.50/lb. $9.00
Total $19.50
Use revealed preference to determine which of the two suspects committed the crime. Explain using indifference curves and budget lines.
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