James and John both consume only poutine and pizza. Both of them always choose to have some poutine and some pizza, and both have strictly convex preferences. However, James likes to have a great deal of poutine with a small slice of pizza, and John likes lots of pizza slices with a small amount of poutine. Both face the same prices for both goods and have chosen bundles to maximize their utilities subject to their budgets. Question 7 options: James's marginal rate of substitution is larger in absolute value than John's. John's marginal rate of substitution is larger in absolute value than James's. Their marginal rates of substitution are the same. Who has the larger marginal rate of substitution depends on income levels. There is not enough information for us to be able to tell who has the larger marginal rate of substitution.
James and John both consume only poutine and pizza. Both of them always choose to have some poutine and some pizza, and both have strictly convex preferences. However, James likes to have a great deal of poutine with a small slice of pizza, and John likes lots of pizza slices with a small amount of poutine. Both face the same prices for both goods and have chosen bundles to maximize their utilities subject to their budgets. Question 7 options: James's marginal rate of substitution is larger in absolute value than John's. John's marginal rate of substitution is larger in absolute value than James's. Their marginal rates of substitution are the same. Who has the larger marginal rate of substitution depends on income levels. There is not enough information for us to be able to tell who has the larger marginal rate of substitution.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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James and John both consume only poutine and pizza. Both of them always choose to have some poutine and some pizza, and both have strictly convex preferences. However, James likes to have a great deal of poutine with a small slice of pizza, and John likes lots of pizza slices with a small amount of poutine. Both face the same prices for both goods and have chosen bundles to maximize their utilities subject to their budgets.
Question 7 options:
James's marginal rate of substitution is larger in absolute value than John's.
John's marginal rate of substitution is larger in absolute value than James's.
Their marginal rates of substitution are the same.
Who has the larger marginal rate of substitution depends on income levels.
There is not enough information for us to be able to tell who has the larger marginal rate of substitution.
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