Johnny has allocated $30 toward coffee and tea and feels that coffee and tea are perfect substitutes. Due to differences

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answerhappygod
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Johnny has allocated $30 toward coffee and tea and feels that coffee and tea are perfect substitutes. Due to differences

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Johnny has allocated $30 toward coffee and tea and feels that
coffee and tea are perfect substitutes. Due to differences in
caffeine levels, his MRS of tea for coffee equals 2. If coffee and
tea sell for the same price, Johnny will Select one:
A. spend $20 on coffee and $10 on tea.
B. spend all $30 on tea.
C. spend all $30 on coffee.
D. be indifferent between any bundle of coffee and tea costing
$30.
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