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8 September, 09:33

Suppose bundle A contains 5 CDs and 5 DVDs and bundle B contains 2 CDs and 6 DVDs. If a consumer is able to rank different combinations of goods and services in terms of how much utility they provide, then

A) the consumer will prefer bundle B to bundle.

B) the consumer will prefer bundle A to bundle.

C) the consumer will be indifferent between bundle A and bundle B.

D) both a and b are possible.

E) a, b, and c are possible.

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Answers (1)
  1. 8 September, 10:29
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    E) a, b, and c are possible.

    Explanation:

    Consumer has different interests, thus they may prefer either Bundle A with same volume of CD or DVDs or bundle B with more DVDs or even neither of any.
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