Carla is deciding how many Strawberries (S) to purchase at $4/box and how many Blueberries (B) to purchase at $3/box. Her utility function is U(S,B) = S*B. This means her marginal utility of Strawberries is MU_S = B and her marginal utility of Blueberries is MU_B = S. Carla has $24 to spend.

1) What is Carla's Marginal Rate of Substitution of Strawberries for Blueberries (in terms of S and B)

a) B/S

b) S

c) S/B

d) S*B

2) Suppose Carla could either change the price of Blueberries to $1/box or she could be given an additional $24 (for $48 in total income). Which would she prefer?

a) Additional $24

b) Blueberries at $1/box

c) Not enough information

d) Indifferent between these two options

3) Suppose Carla is offered the 4 bundles listed below at the exact same discounted price of $24. Which bundle would she choose?

a) 5 S and 5 B

b) 4 S and 6 B

c) 3 S and 8 B

d) 1 S and 20 B

4) What is Carla's Marginal Utility for Strawberries (MU_S) when she has purchase 2 S and 3 B

a) 3

b) 2

c) 3/2

d) 2/3