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10) Suppose that the utility function of an individual can be described as U(X,Y) = 4X + 2Y. For this utility function the MRS A)
10) Suppose that the utility function of an individual can be described as U(X,Y) = 4X + 2Y. For this utility function the MRS A) is always X*Y B) is always constant C) is always X/Y D) is always X+Y E) is always X-Y = . 11) Stanley consumes only white and red wines and his utility function can be described by U(R,W) R0.40 W0.60, where R is the number of bottles of red wine and W is the number of bottles of white wine that he consumes per month. Suppose that his income is $500 and the price of a bottle of red wine $20 and the price of a bottle of white wine is $15. In this case, Stanley will purchase bottles of red wine and white wine per month. Next, suppose that the price of red wine goes up to $35 per bottle. In this case, Stanley would consume quantity of bottles of white wine compared to the original situation. A) 10; 20; smaller B) 20; 10; smaller C) 10; 20; the same D) 20; 10; the same E) None of the above bottles of
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