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4. Apples cost $30 per bushel, and hay costs $10 per bushel. At Mr. Ed’s current...

4. Apples cost $30 per bushel, and hay costs $10 per bushel. At Mr. Ed’s current level of consumption, his marginal rate of substitution of apples for hay (MRSAH) is 1. Assume that his indifference curves have the “standard” curved shape. (3 points each) a. Is Mr. Ed maximizing his utility? Explain why or why not. b. If not, is he buying too many apples or too much hay? Explain.

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