Question
Hi. I have troubles figuring out how to find the answer to this assignment: Emiliano lives in Chicago where he consumes two goods: Books, B,
Hi. I have troubles figuring out how to find the answer to this assignment:
Emiliano lives in Chicago where he consumes two goods: Books, B, and coffee, C. Furthermore, assume that good B is on the x-axis and good C is on the y-axis. The utility function: U(B, C) = 5BC describe Emiliano's preferences where B and C denote the number of books and cups of coffee, respectively.
The price of one book, pB, is 6 and the price of one cup of coffee, pC , is 8.
a) Illustrate Emiliano's indifference curves.
b) What is Emiliano's marginal rate of substitution (MRS)
c) What is the utility maximizing C/B -ratio?
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Strategic Management And Business Policy: Globalization, Innovation And Sustainability
Authors: Thomas L. Wheelen, J. David Hunger, Alan N. Hoffman, Chuck Bamford
14th Edition
0133126145, 978-0133126143
