Assume Ron always eats 1 biscuit (B) with every 2 cups of tea (T) that they...

 

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Assume Ron always eats 1 biscuit (B) with every 2 cups of tea (T) that they drink. They only enjoy an additional cup of tea if they get 1/2 of an additional biscuit to go with it, and they only enjoy an additional biscuit of they also get an additional 2 cups of tea. Suppose they have $56 to spend on tea and biscuits this week, and a cup of tea costs $3 while a biscuit costs $2. Ron's utility function can be expressed as U(B,T) = min(2B, T) What is their optimal consumption bundle? OB=7, T = 14 OB=0, T = 14 OB=16, T = 8 OB=16, T=0 O None of the above Assume Ron always eats 1 biscuit (B) with every 2 cups of tea (T) that they drink. They only enjoy an additional cup of tea if they get 1/2 of an additional biscuit to go with it, and they only enjoy an additional biscuit of they also get an additional 2 cups of tea. Suppose they have $56 to spend on tea and biscuits this week, and a cup of tea costs $3 while a biscuit costs $2. Ron's utility function can be expressed as U(B,T) = min(2B, T) What is their optimal consumption bundle? OB=7, T = 14 OB=0, T = 14 OB=16, T = 8 OB=16, T=0 O None of the above

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None of the above Explanation Since UBT min2B T ... View the full answer