3.1 Laidback Al derives utility from 3 goods: music (M), wine (W ), and cheese (C). His...

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3.1 Laidback Al derives utility from 3 goods: music (M), wine (W ), and cheese (C). His utility function is of the simple linear form utility  U(M, W, C)  M  2W  3C.

a. Assuming Al’s consumption of music is fixed at 10, determine the equations for the indifference curves for W and C for U  40 and U  70. Sketch these curves.

b. Show that Al’s MRS of wine for cheese is constant for all values of W and C on the indifference curves calculated in part (a).

c. Suppose Al’s consumption of music increases to 20. How would this change your answers to parts

(a) and (b)? Explain your results intuitively.

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