Question
A consumer has Cobb-Douglas preferences for Nuts and Corn, given by U(N, C) = 3N 3C 2 (a) In economics, what does the term MRS
A consumer has Cobb-Douglas preferences for Nuts and Corn, given by U(N, C) = 3N 3C 2
(a) In economics, what does the term "MRS" stand for? Explain in words the meaning of the term "MRS of Nuts'.
(b) Find the MRS of Nuts at the bundle (1 Nut, 2 Corn) The consumer has a budget of M = 50 dollars. The price of 1 unit of Nuts is PN = 1, and the price of Corn is PC = 2.
(c) Find the consumer's optimal consumption bundle, given the above prices and budget.
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Macroeconomics
Authors: N. Gregory Mankiw, William M. Scarth
5th Canadian Edition
1464168504, 978-1464168505
