Julio receives utility from consuming food (F) and clothing (C) as given by the utility function

U(F,C)=FC. In addition, the price of food is $5 per unit, the price of clothing is $9 per unit, and Julio's weekly income is $50. What is Julio's marginal rate of substitution of food for clothing when utility is maximized? Julio's marginal rate of substitution equals 0.56.

Suppose instead that Julio is consuming a bundle with more food and less clothing than his utility maximizing bundle. Would this marginal rate of substitution of food for clothing be greater than or less than your answer above?

If Julio is instead consuming a bundle with more food and less clothing than his utility maximizing bundle, then his marginal rate of substitution will be

less than

equal to

greater than

0.56

because he will be consuming a bundle on the indifference curve that is

equal to

to the right of

to the left of

his satisfaction maximizing bundle.