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Suppose a consumer is faced with the following choices of two goods that will give the consumer the same level of satisfaction. Units of entertainment
Suppose a consumer is faced with the following choices of two goods that will give the consumer the same level of satisfaction. Units of entertainment are 35, 20, 10, 5, 3, 2 and the units of food are 7, 11, 15, 20, 30, and 45. How can I get the numbers for the MRS(FE) and show me the formula? If the price of entertainment is $10/unit and the price of food is $20/unit, what is the Price Ratio that you would use to find copy optimum? Please show me what is the formula to get the ratio? How many of each product will this consumer purchase at consumer optimum? What is the amount spend by the consumer at consumer optimum? And if the price of entertainment rise to $40/unit, what is the new consumer optimum? (I.e. How many of each product is purchased at consumer optimum?)
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