Question
Judith Grimes wants to switch her cellphone carrier to mobile virtual network operator (MVNO). FreedomMobile offers a plan with no monthly service fee and a
Judith Grimes wants to switch her cellphone carrier to mobile virtual network operator (MVNO). FreedomMobile offers a plan with no monthly service fee and a price of $8 per GB data usage. Judith has a monthly income of $270, and her utility function is U=x1/2g1/2, where x is money spending on other goods and g is the amount of GB data usage.
a.Write down Judith's budget constraint. (Hint: the price of 'money" is $1)x + 8g =(please round to integer)
b. Calculate the MRS =MUx/MUg of Judith's utility function. x/g(please round to integer)
c. If Judith chooses FreedomMobile's plan, at her optimal consumption bundle, she should useGB data.(please round to integer)
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