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Maire and Elizabeth allocate 1000 per year to refreshments in the form of Fanta (F) and Coke (C). While they each like both types of
Maire and Elizabeth allocate 1000 per year to refreshments in the form of Fanta (F) and Coke (C). While they each like both types of refreshment, Maire much prefers Fanta while Elizabeth much prefers Coke. On a single diagram, draw a set of indifference curves for Maire and for Elizabeth. Use the concept of marginal rate of substitution to explain why both sets of indifference curves are different from each other. Can Maire's indifference curves cross those of Elizabeth?
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