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I know the price of one bagel is $3.00 and the price of one cup of coffee is $2.00 per unit. The marginal utility of
I know the price of one bagel is $3.00 and the price of one cup of coffee is $2.00 per unit. The marginal utility of a bagel at a bundle the consumer is considering buying is 6 and the marginal utility of a cup of coffee is 5. This bundle is on the budget line.
Is the bundle the consumer is considering buying the optimal bundle? Why or why not?
Show on graph the consumption bundle described in the introduction to this problem and where it lies in relation to the optimal bundle.
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