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Nguyen enjoys both muffins (a1 ) and doughnuts (2) and will trade between them at a constant rate. Specifically, her preferences for muffins and doughnuts
Nguyen enjoys both muffins (a1 ) and doughnuts (2) and will trade between them at a constant rate. Specifically, her preferences for muffins and doughnuts can be represented by the utility function u(x1, x2) = 45x1 + 90x2. V 1st attempt Part 1 (2 points) See Hint Suppose that Nguyen only eats muffins and achieves a utility of 720. How many muffins would she consume? If Nguyen were to achieve the same utility with only doughnuts, how many doughnuts would she consume?You can find an indifference curve for Nguyen for all bundles that result in utility of 720 by setting 720 = 45x1 + 90x2. Solve this equation for $2 T2 = C1 Now graph Nguyen's indifference curve using the straight line tool. To refer to the graphing tutorial for this question type, please click here. Nguyen's Breakfast Doughnuts 16 15 14 13 12 11 MuffinsNguyen is indifferent between the bundles (6,3) and {12,0}. Suppose that both bundles are doubled (meaning each good is doubled in each bundle). Is Nguyen indifferent between the doubled bundles? Choose one: 0 A. Yes, but this result does not generally hold for this type of utility function. 0 B. Yes, with this utilityfunction she will always be indifferent between the doubled amounts of bundles that she is already indifferent between. 0 C. There is not enough information to say. 0 D. No, she will not be indifferent. Calculate Nguyen's marginal rate of substitution. How does her MRS change if x2 increases? Choose one: O A. There is no change. O B. There is not enough information to say. O C. Nguyen's MRS decreases. O D. Nguyen's MRS increases
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