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Consider the trade-off between muffins and coffee. Suppose that at the current level of consumption, the consumer is willing to trade 2 muffins for a
Consider the trade-off between muffins and coffee. Suppose that at the current level of consumption, the consumer is willing to trade 2 muffins for a cup of coffee. The price of muffins is $2 each and the price for each coffee is $4.00. The consumer has $20 to spend (each week) on muffins and coffee (and always spend all of it). a) What is the consumer's MRS? b) Is the consumer currently in equilibrium? Explain. c) What must the consumer do to move closer to equilibrium
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