Consumers in Washington pay twice as much for avocado as they do for cherries. However, in California, avocados and cherries are the same price.

Consumers in Washington pay twice as much for avocado as they do for cherries. However, in California, avocados and cherries are the same price.

10. What are consumers’ budget lines in these two states? Note: avocados are on the x-axis, cherries are on the y-axis

11. If consumers in both states maximize utility, what will be true about the MRS of cherries for avocados?

+ MRS will be greater in Washington

+ MRS will be greater in California

+ MRS will be the same in Washington and California