1 What is the marginal rate of substitution for X with Y when U = 2X + 3Y?

-1.5

-1.5X/Y

0.6667

0.6667X/Y

2 Billy's preferences can be represented by utility function U = 3X^0.4Y^0.3and he is indifferent between baskets A and B. What is the value of Y*?

Basket A = (Xa = 10, Ya =21)Basket B = (Xb = 19.5 , Yb = Y*)

3 A funny story that happened last semester here at the University of Illinois: Paul confessed to his British friend Sandra that, when it comes to Fish (F) and beef (B), he has perfect substitutes preferences. Sandra responded, "Well, Paul, you've never been a well-behaved bloke, have you?".Based on this story, select the correct alternative:

Sandra's joke is a reference to the fact that Paul's preferences are not well-behaved, since they violate the diminishing marginal rate of substitution assumption.

One possibility for Paul's utility function is U = 4F^0.5B^0.5.

Sandra's joke is a reference to the fact that Paul's preferences are not well-behaved, since they violate the "more is better" assumption.

Sandra's joke is a reference to the fact that Paul's preferences are not well-behaved, since they violate the transitivity assumption.