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a-) Suppose that Mr. Hitchcock derives utility from drinking coffee in exact proportion of two cup of coffee (X) to three creams (Y). Write the
a-) Suppose that Mr. Hitchcock derives utility from drinking coffee in exact proportion of two cup of coffee (X) to three creams (Y). Write the utility function according to Mr. Hitchcock's preferences. What kinds of preferences are represented by this utility function? What is the marginal rate of substitution (MRS) between coffee (X) and cream (Y)? Graph his indifference map. b-) Suppose now that Mr. Hitchcock will always trade 4 cups of coffee (X; on the vertical axis) for 2 cups of tea (Z; on the horizontal axis) if he has more coffee than tea. On the other hand, if he has more tea than coffee, he always trade 1 cup of coffee (X) for 2 cups of tea (Z). Draw an indifference curve according to Mr. Hitchcock's preferences. What is the marginal rate of substitution (MRS) between coffee (X) and tea (Z) in each section? a-) Suppose that Mr. Hitchcock derives utility from drinking coffee in exact proportion of two cup of coffee (X) to three creams (Y). Write the utility function according to Mr. Hitchcock's preferences. What kinds of preferences are represented by this utility function? What is the marginal rate of substitution (MRS) between coffee (X) and cream (Y)? Graph his indifference map. b-) Suppose now that Mr. Hitchcock will always trade 4 cups of coffee (X; on the vertical axis) for 2 cups of tea (Z; on the horizontal axis) if he has more coffee than tea. On the other hand, if he has more tea than coffee, he always trade 1 cup of coffee (X) for 2 cups of tea (Z). Draw an indifference curve according to Mr. Hitchcock's preferences. What is the marginal rate of substitution (MRS) between coffee (X) and tea (Z) in each
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