Suppose Alex’s utility function for appleand orange is U(a, o) = a2o. The price of an apple is $ 4, and the price of an orange is $ 2. Alexhas $ 120 to spend on these two goods. – at the bundle (a, o) = (4, 2) the marginal rate of substitution MRS(a, o) = ____?? – Given prices, income, and utility function, the best affordable bundle for Alex is a ∗ = __ ??and o∗ = __??
Suppose Alex’s utility function for appleand orange is U(a, o) = a2o. The price of an apple is $ 4, and the price of an orange is $ 2. Alexhas $ 120 to spend on these two goods. – at the bundle (a, o) = (4, 2) the marginal rate of substitution MRS(a, o) = ____?? – Given prices, income, and utility function, the best affordable bundle for Alex is a ∗ = __ ??and o∗ = __??
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose Alex’s utility function for appleand orange is U(a, o) = a2o. The price of an apple is $ 4, and the price of an orange is $ 2. Alexhas $ 120 to spend on these two goods.
– at the bundle (a, o) = (4, 2) the marginal rate of substitution MRS(a, o) = ____??
– Given prices, income, and utility function, the best affordable bundle for Alex is a
∗ = __ ??and
o∗ = __??
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