Waldo consumes only apples and bananas and bananas are an inferior good for him. The price of apples increases, but there is an increase in his income that keeps him on the same indifference curve as before. (Waldo has convex preferences, and he prefers more to less of either good.)

a After the change, Waldo will buy fewer of both goods.
b After the change, Waldo will buy more of both goods.
c After the change, Waldo will buy more bananas and fewer apples.
d After the change, Waldo will buy fewer bananas and more apples.
e We would need to know his utility function to determine whether any of the above statements are true.

The correct answer to this question is option C

Explanation:

Solution

Any difference curve will show all the combinations of goods that gives the consumer the same level of utility or same level of satisfaction.

For this, after the change Waldo will by more bananas and few apples

From the given question, The right answer here is option C

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.