Question
Dana has standard consumer preferences over two goods: hours spent watching football (W) and hours spent playing football (P). He is indifferent between the bundles:
Dana has standard consumer preferences over two goods: hours spent watching football (W) and hours spent playing football (P). He is indifferent between the bundles: A=(2W,1P) and B=(1W,2P). He is offered a third bundle C=(1.5W,1.5P). Based on the preference assumptions, what might we say about Dana's preferences for C relative to A or B?
2.Like Dana, Eric has standard consumer preferences over two goods: prescription antidepressants and chocolate. Eric's marginal rate of substitution of antidepressants for chocolate is 2. How much is the total utility of antidepressants relative to the total utility of chocolate for Eric?
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