Mary spends all her budget on statistical software (S) and office supplies(O). Her preferences can be represented by the utility function: U(S, O) =2 ln(S) + 3 ln(O). Compute the marginal rate of substitution of software for office supplies. Is the MRS increasing or decreasing in S? How do we interpretthis?

Q: It is known that the indifference curve is convex. What does this tell you about the relationship…

A: The indifference curve refers to the graphical representation of different combinations of two goods…

Q: loui's preferences over pizza (x) and other goods (y) are given by U(X,Y)=XY^2, with associated…

A: It is given that,U(x, y) = xy2,M = $240,Price of pizza Px is $8, Price of other good Py = $1, and…

Q: a. What is your marginal rate of substitution of $1 bills for $5 bills? b. Produce an indifference…

A: (a) b) Note that this MRS of $1 bills to $5 bills is constant, i.e, the slope of the required…

Q: Originally the consumer faces the budget line p1x1 + p2x2 = m. Then the price of good 1 doubles, the…

A: Budget line shows all possible combination of two goods that consumer is able to consume when…

Q: 1. Mansour consumes only peanut butter (X) and jelly (Y) and has the following utility function: U =…

A:

Q: 3. Pedro's utility function over two goods, X and Y, is given by: U = AXªY® (a) Find the marginal…

A: We are going to use Consumer decision theory to answer this question.

Q: If Porsha view 3 glasses of juice as a perfect substitute for one cup of soda and vice versa, what…

A: The marginal rate of substitution is defined as how many numbers of good x have to be substituted to…

Q: Assume that a consumer can buy only two goods, X and Y, and has an income of $13,000. The price of X…

A: Consumer income (M)= $13,000. Price of good X = $60Price of good Y = $140The budget line shows the…

Q: the MRS = -N/W.   The budget constraint is: 1,600 = 2*N + 20*W   Graph Qty of noodles (N) on…

A: Utility function given above is convex to the origin because as we move down the the IC the MRS…

Q: Fabian With a utility function of U-2XY, Fabian's MU, = 2Y and his MUy = 2X , where MU is marginal…

A: The equilibrium is established where the MUx/MUy = Px/Py

Q: In the theory of consumer behavior, what are the three basic assumptions about individual…

A: Consumer behavior defines the study of how individuals, households, or organizations make choices…

Q: a) Suppose a consumer has a budget for fast-food items of $20 per week and spends this money on two…

A: Budget line refers to the line that shows the combination between two goods that can be purchased…