c Serpil's utility function is U(B,C)= B · C , where B = veggie burgers per week and C = packs of cigarettes per week. %3D a) What is her marginal rate of substitution if veggie burgers are on the vertical axis and cigarettes are on the horizontal axis? b) Serpil's income is $120, the price of veggie burger is $2, and that of a pack of cigarettes is $1. How many burgers and how many packs of cigarette does Serpil consume to maximize her utility? Illustrate your answers in a graph.

Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 8SQP
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c Serpil's utility function is U(B,C)= B · C , where B = veggie burgers per week and C = packs of
cigarettes per week.
a) What is her marginal rate of substitution if veggie burgers are on the vertical axis and
cigarettes are on the horizontal axis?
b) Serpil's income is $120, the price of veggie burger is $2, and that of a pack of cigarettes is
S1. How many burgers and how many packs of cigarette does Serpil consume to maximize
her utility? Illustrate your answers in a graph.
Transcribed Image Text:c Serpil's utility function is U(B,C)= B · C , where B = veggie burgers per week and C = packs of cigarettes per week. a) What is her marginal rate of substitution if veggie burgers are on the vertical axis and cigarettes are on the horizontal axis? b) Serpil's income is $120, the price of veggie burger is $2, and that of a pack of cigarettes is S1. How many burgers and how many packs of cigarette does Serpil consume to maximize her utility? Illustrate your answers in a graph.
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