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A sandwich lover divides their spending between Bread and Cheese. Their Marginal Utility from the Bth slice of bread is: M UB = 16 B
A sandwich lover divides their spending between Bread and Cheese. Their Marginal Utility from the Bth slice of bread is: M UB = 16 B Their Marginal Utility from the 0th slice of cheese is: MUC:243C The price of bread is PB : 0.5. The price of cheese is PC : 1. The consumer has M : 9 dollars to spend. (a) Based on the marginal dollar approach, write down an equation containing M UB, M U0, P0, P3 that must be true when the consumer is maximizing their happiness. (b) Suppose that the consumer currently plans to purchase 6 slices of bread and 6 slices of cheese. Using your previous answer, how could the consumer increase their happiness without spending more money? (0) Write down the equation of the consumer's budget line. (You may choose either good to be the yaxis) (d) Using the equations from parts a) and c), solve for the amount of bread the amount of cheese that the consumer should buy to maximize their happiness
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