Assuming that both Joe and Hammad are maximizing their utility, what is Joe's marginal rate of substitution? Round your answers to two decimal places. What is Hammad's marginal rate of substitution?

Microeconomics
13th Edition
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter7: Consumer Choice: Maximizing Utility And Behavioral Economics
Section: Chapter Questions
Problem 6QP
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Pizzas (₁) cost $9.00 each. A cup of coffee (₂) costs $3.00. Joe's income is $520.00, and his preferences are represented by the utility function
¹.2. Hammad's income is $790.00, and his preferences are represented by the utility function 29.¹.
Assuming that both Joe and Hammad are maximizing their utility, what is Joe's marginal rate of substitution? Round your answers to
two decimal places.
What is Hammad's marginal rate of substitution?
Transcribed Image Text:Pizzas (₁) cost $9.00 each. A cup of coffee (₂) costs $3.00. Joe's income is $520.00, and his preferences are represented by the utility function ¹.2. Hammad's income is $790.00, and his preferences are represented by the utility function 29.¹. Assuming that both Joe and Hammad are maximizing their utility, what is Joe's marginal rate of substitution? Round your answers to two decimal places. What is Hammad's marginal rate of substitution?
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