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e) The equation for your indifference curve through the point (4,6) isxg, = f) You currently have the bundle (rmxb) = (4,6). Your roommate wants
e) The equation for your indifference curve through the point (4,6) isxg, = f) You currently have the bundle (rmxb) = (4,6). Your roommate wants to give you 9 bananas in return for 3 apples. Should you accept the offer? 9) Mark the bundle (1,15) on the graph. h) Your friend tells you, " Your marginal rate of substitution is -2, which means that for an extra apple, you should be willing to trade two bananas. I am offering 3 bananas for every apple of yours. Since I am offering more than your marginal rate of substitution, you should accept my offer." You reply, "You're right that my MRS is -2. But MRS holds only for small trades where the change in apples is small. Your offer of 9 bananas for 3 apples is too big of a trade. You see, my indifference curve is not a straight line." Given this conversation between you and yourfriend, would you be willing to give up 1 apple for 3 bananas? i) Would you be willing to give up 2 apples for 6 bananas? j) On the graph, draw a line with slope -3 through the point (4,6). This line shows all bundles that you should be willing to trade at the rate of 1 apple for 3 bananas. Label the segment of the line that represents trades that make you better of than without trade
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