Manuel is a consuming his optimal bundle, and is currently willing to give up 5 apples to obtain 1 orange. Jorge is in the same economy and consuming his optimal bundle, but his marginal utility of oranges is twice that of Manuel. How many apples is Jorge willing to give up to obtain 1 orange? Explain Briefly.
Since Jorge's marginal utility of oranges is twice that of Manuel's, this means that Jorge values oranges more than Manuel does. Therefore, Jorge is willing to give up more apples to obtain 1 orange compared to Manuel. Specifically, if Manuel is willing to give up 5 apples to obtain 1 orange, Jorge would be willing to give up more than 5 apples to attain the same orange. The exact number of apples Jorge is willing to give up may depend on the specific utility functions and preferences of each individual.
Since Manuel is currently willing to give up 5 apples to obtain 1 orange, we can say that his marginal rate of substitution (MRS) of apples for oranges is 5:1.
Given that Jorge's marginal utility of oranges is twice that of Manuel, we can infer that Jorge's MRS of apples for oranges will be higher than 5:1. This means that Jorge is willing to give up more apples to obtain 1 orange compared to Manuel.
Therefore, we can conclude that Jorge will be willing to give up more than 5 apples to obtain 1 orange. The exact quantity will depend on the specific relationship between Jorge's marginal utility of oranges and his MRS of apples for oranges.