Question:

Micro Econ Question regarding Marginal Rate of Sub..please help.?

by Guest45463  |  earlier

0 LIKES UnLike

Use the following information to answer questions 25 through 27. Tina, a utilizing maximizing consumer,

consumes chicken wings (denoted as X) and cans of Pepsi (denoted as Y). Tina has two market baskets on her

indifference curve with (X, Y) coordinates of (4, 12) and (6, 4). The slope of Tina’s budget line is 3.

_____ 25. Given the two points on the indifference curve, the marginal rate of substitution of chicken wings

for Pepsi ( )XYMRS _____.

A. 12

B. 8

C. 6

D. 4

_____ 26. Is Tina maximizing utility?

A. Yes

B. No

_____ 27. Given your answer to question 26, what should Tina do?

A. Continue consuming the same number of chicken wings and bottle of cans of Pepsi.

B. Consume more chicken wings and fewer cans of Pepsi.

C. Consume fewer chicken wings and more cans of Pepsi.

D. Consumer fewer chicken wings and fewer cans of Pepsi.

I know answers, but don't understand how to get them!

 Tags:

   Report

1 ANSWERS


  1. 25 - D. 4

    26 - A. Yes (given by initial definition - but to check if it is right - prices of goods should be given - they might me given in previous questions).

    27 - A. Continue consuming the same number of chicken wings and bottle of cans of Pepsi (if 26 is right).

Question Stats

Latest activity: earlier.
This question has 1 answers.

BECOME A GUIDE

Share your knowledge and help people by answering questions.