Sarah has the utility function U(X,Y)=X°Y<°, When Sarah consumes X=2 and Y=6 she has a marginal rate of substitution (defined as the willingness to give up exchange for X) of ... OA. -6 B. - 12 OC. - 1/12 D. - 1/6
Sarah has the utility function U(X,Y)=X°Y<°, When Sarah consumes X=2 and Y=6 she has a marginal rate of substitution (defined as the willingness to give up exchange for X) of ... OA. -6 B. - 12 OC. - 1/12 D. - 1/6
Chapter4: Utility Maximization And Choice
Section: Chapter Questions
Problem 4.4P
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Transcribed Image Text:Sarah has the utility function U(X,Y)=x°y•<°, When Sarah consumes X=2 and Y=6 she has a marginal rate of substitution (defined as the willingness to give up Y
exchange for X) of
O A. -6
О В. -12
Ос. - 1/12
O D. - 1/6
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DD
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F2
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F7
F8
F9
F10
F11
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Transcribed Image Text:A consumer has $200 per month to be speht on books (good B) and DVDS (good
D).
11-
Market prices are as follows:
10-
P3 = $40 and P, = $20.
9-
Use the line drawing tool to plot this consumer's budget constraint. Label this line
"Budget'.
7
Carefully follow the instructions above, and only draw the required object.
Given this data, what is the marginal rate of transformation?
4-
MRT = (Enter your answer as a real number rounded to two decimal places.
3-
Be sure to include the minus sign)
1-
0-
Books
Reaction
tv
MacBook Air
80
DII
DD
F1
F2
F3
F4
F5
F6
F7
F8
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F10
F11
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4
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DVDS
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