Suppose Julia currently consumes positive amounts of cheesecake and coffee and her marginal rate of substitution is four slices of cheesecake for one cup of coffee. If the price of a slice of cake is $3 and the price of coffee is $1.5, Julia is maximizing her welfare. The short run cost function for a firm is C(v, w, q, k) 23/2 2 + vk. The underlying = W production function exhibits constant returns to scale.

Suppose Julia currently consumes positive amounts of cheesecake and coffee and her marginal rate of substitution is four slices of cheesecake for one cup of coffee. If the price of a slice of cake is $3 and the price of coffee is $1.5, Julia is maximizing her welfare. The short run cost function for a firm is C(v, w, q, k) 23/2 2 + vk. The underlying = W production function exhibits constant returns to scale.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter10: Cost Functions

Section: Chapter Questions

Problem 10.12P

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