Recent research by economists David Cutler, Edward Glaeser, and Jesse Shapiro on Americans' increasing obesity points to improved technology in the preparation of tasty and more caloric foods as a possible explanation of weight gain. Before World War II, people rarely prepared French fries at home because of the significant amount of peeling, cutting, and cooking required. Today French fries are prepared in factories using low-cost labor, shipped frozen, and then simply reheated in homes. Paul consumes two goods: potatoes and leisure, N. The number of potatoes Paul consumes does not vary, but their tastiness, T, does. For each extra unit of tastiness, he must spend p hours in the kitchen. Thus, Paul's time constraint is N+pT = 24, and Paul's utility function is U = 1 = T(N)0.5 Paul's marginal rate of substitution (MRS), with T measured on the horizontal axis and N measured on the vertical ax is N MRS 2- 27. (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a fraction can be created with the character.) Paul's marginal rate of transformation (MRT), with T measured on the horizontal axis and N measured on the vertical axis, is Paul's optimal choice, (T*,N*), is T* = =and N*= MRT = - P. (Properly format your expression using the tools in the palette.)
Recent research by economists David Cutler, Edward Glaeser, and Jesse Shapiro on Americans' increasing obesity points to improved technology in the preparation of tasty and more caloric foods as a possible explanation of weight gain. Before World War II, people rarely prepared French fries at home because of the significant amount of peeling, cutting, and cooking required. Today French fries are prepared in factories using low-cost labor, shipped frozen, and then simply reheated in homes. Paul consumes two goods: potatoes and leisure, N. The number of potatoes Paul consumes does not vary, but their tastiness, T, does. For each extra unit of tastiness, he must spend p hours in the kitchen. Thus, Paul's time constraint is N+pT = 24, and Paul's utility function is U = 1 = T(N)0.5 Paul's marginal rate of substitution (MRS), with T measured on the horizontal axis and N measured on the vertical ax is N MRS 2- 27. (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a fraction can be created with the character.) Paul's marginal rate of transformation (MRT), with T measured on the horizontal axis and N measured on the vertical axis, is Paul's optimal choice, (T*,N*), is T* = =and N*= MRT = - P. (Properly format your expression using the tools in the palette.)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Recent research by economists David Cutler, Edward Glaeser, and Jesse Shapiro on Americans' increasing obesity
points to improved technology in the preparation of tasty and more caloric foods as a possible explanation of weight
gain. Before World War II, people rarely prepared French fries at home because of the significant amount of peeling,
cutting, and cooking required. Today French fries are prepared in factories using low-cost labor, shipped frozen, and
then simply reheated in homes. Paul consumes two goods: potatoes and leisure, N. The number of potatoes Paul
consumes does not vary, but their tastiness, T, does. For each extra unit of tastiness, he must spend p hours in the
kitchen.
Thus, Paul's time constraint is N+pT = 24, and Paul's utility function is U =
Paul's marginal rate of substitution (MRS), with T measured on the horizontal axis and N measured on the vertical axis,
is
N
MRS = 2. (Properly format your expression using the tools in the palette. Hover over tools to see keyboard
shortcuts. E.g., a fraction can be created with the / character.)
Paul's marginal rate of transformation (MRT), with T measured on the horizontal axis and N measured on the
vertical axis, is
Paul's optimal choice, (T*,N*), is
= T(N) ⁰.5
T* =
and N* =
MRT = p.
. (Properly format your expression using the tools in the palette.)
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