2. Symbolic Consumer Choice: Patrick lives in a simple world where there are only two consumer goods, french fries (f) and kolbassa (k), both of which align well with his interests. Patrick's preferences over possible bundles of french fries and kolbassa are given by the utility function: U(f,k) = 2f0.5 40.5. The prices of a frisbee and of a kabob are pf and Pk. a. Graph Patrick's budget constraint with french fries on the x-axis and kolbassa on the y-axis. What is the marginal rate of transformation (MRT)? In no more than two sentences define an MRT and explain conditions under which it would be get steeper. b. What is the marginal rate of substitution (MRS)? Define it no more than two sentences and calculate it. Consider two simple positive monotonic transformations of Patrick's utility function. The first is C. U(f, k) = fk. The second U(f, k) = lnf + lnk. Calculate the MRS for each of these transformations
2. Symbolic Consumer Choice: Patrick lives in a simple world where there are only two consumer goods, french fries (f) and kolbassa (k), both of which align well with his interests. Patrick's preferences over possible bundles of french fries and kolbassa are given by the utility function: U(f,k) = 2f0.5 40.5. The prices of a frisbee and of a kabob are pf and Pk. a. Graph Patrick's budget constraint with french fries on the x-axis and kolbassa on the y-axis. What is the marginal rate of transformation (MRT)? In no more than two sentences define an MRT and explain conditions under which it would be get steeper. b. What is the marginal rate of substitution (MRS)? Define it no more than two sentences and calculate it. Consider two simple positive monotonic transformations of Patrick's utility function. The first is C. U(f, k) = fk. The second U(f, k) = lnf + lnk. Calculate the MRS for each of these transformations
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter6: Consumer Choice And Demand
Section: Chapter Questions
Problem 2QFR
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