Suppose that consumers in Bangladesh pay twice as much per unit for mangoes as they pay for
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Suppose that consumers in Bangladesh pay twice as much per unit for mangoes as they pay for bananas, whereas consumers in Indonesia pay half as much for mangoes as they pay for bananas. Assuming that consumers maximize their utility, which country's consumers have a higher marginal rate of substitution of mangoes for bananas? Explain your answer.
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Understanding Utility Maximization Before we dive into comparing the marginal rate of substitution MRS of mangoes for bananas between consumers in Ban...View the full answer
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